Payments Buzzwords (yet even more)
Phew, I’m exhausted from this whirlwind week of industry sessions galore at Money20/20. As we approach the weekend, I’m ready to kick back and…wait a minute, I think it’s time for a third (and perhaps final…or not) edition of 2017 Payments Buzzwords.
Omnicommerce – One thing that really stuck out (at least to me) at this year’s Money20/20, there were A LOT of physical commerce items on display, be it POS terminals or Biometric palm readers, the physical in-person commerce products were on full display. While mobile and online shopping have continued to rapidly rise in importance, we are seeing instances of the “eCommerce” world really push into the physical (see Amazon looking to open 2,000 grocery stores in the US over the next 10 years). From a financial institution standpoint, this is an important trend to watch as “digital transformation” strategies oftentimes over-emphasize the importance of digital-only or, rather, drastically de-emphasize the value in the physical.
Biometrics – My colleague pointed out to me on a few occasions that once you lifted some of the pre-conceived bias on what to look for on the show floor, you noticed that Biometrics may have been the most prominent topic in terms of vendor focus. From selfie-in-the-moment authentication to the aforementioned vein and palm readers (which still make me think of Minority Report), biometric firms were everywhere…and their timing couldn’t be better as the focus of openness is forcing everyone to rethink authentication and take advantage of technologies that while some still label as “science fiction,” they actually impede customers less to create a more frictionless consumer journey. Anyone think DNA scanning is next?
Open APIs – I’ll say for those who have been following this topic, you likely know my sentiment, but in my eyes, this is the topic that should and will dominate board room discussions for the next 12 months. The “European Experiment,” aka PSD2, is going to be in full swing with lessons learned and best practices by next year’s conference season as they set up for a go-live in early 2018. All eyes in the industry will be watching, and I personally can’t wait to see what new financial solutions the combined meetings of the best brains in our industry start developing. The new post-PSD2 world could look dramatically different, but we’ll just have to hang onto our seats and wait to see how the experiment plays out.
Immediate Payments – Whether it’s immediate or just faster, the speed of payments globally is accelerating. Whether it was the Zelle announcement(s) or discussions around Same Day ACH, the immediate payments space had its share of spotlight this week. As the world is shifting to real time, it will be interesting to see how this topic dovetails with the next topic of blockchain, especially as it relates to payments, but suffice it to say, our industry’s global infrastructure is definitely looking more modern by the day.
Blockchain and Distributed Ledgers – Coming back to Visa's announcement on a partnership with Chain and letting it set in a bit more, I am coming around on the thought that the technology is more mature than many had given it credit for. So I would reiterate what I said earlier in the week, we remain bullish on the potential and are beginning to shift from bearish to bullish on timing in terms of mass market adoption (maybe to the “within 5 years” category).
[NAME] Pay – From Apple Pay to Walmart Pay, the [NAME] Pays were not far from any discussion, both on the floor and in the rooms and often times on the main stage. While the proliferation of Pays will continue, the phenomena of checkout paralysis will become very real. I am intrigued to see how this story plays out, but I also hope that for the sake of our industry, more storefronts will turn on their NFC capabilities to increase acceptance of mobile-based payments. As a mobile pay user, I for one am looking to leave my George Costanza wallet at home more often, it’s just better for my back that way.
Ecosystem – Partnership announcements are one of my favorite parts of Money20/20. Don’t get me wrong, product launches are great, but our industry will be elevated by partnerships and working together. We are seeing it in Europe as countries put together open working groups that have competitors working alongside one another to solve very complex problems. If we as an industry hope to survive the “disruption event” we are in today, I think joining more holistically together as an ecosystem needs to be a key tenet. My favorite quote of the week was “The payments race going on today doesn’t have to be a winner take all event,” as the pie continues to grow in size there will be plenty of growth opportunity for all of us. As Mike Braatz said on his panel this week, “Innovation will come from a lot of places, not just within, so platforms to build upon will be essential…” Couldn’t have said it better myself.
BONUS – 2020 – When everyone started talking about the year 2020, it was in an imaginary future kind of way, similar to the way we thought we would have flying cars by the year 2015 (for those of you who are really into Back to the Future, the thought was we’d be there by October 21, 2015). 2020 is now in our three-year planning windows, which means we’ll be funding projects and products that will be sold and implemented in market in the year 2020, and while we likely will still have checks, cash coin and card swiping, the world of payments will certainly look closer to the projected realities of the first Money2020 5 years ago than many of us believed possible at the time. Time to start projecting for 2030 (which we are closer to today than the year 2000….)
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