The Climate, Weather and Payments – What the Winds Tell Us?
I am sitting in my home watching snow fall, it’s April and I just spent the weekend prepping my yard for the upcoming summer season. To say the weather patterns are odd is an understatement. The global climate is warming as we know. And though you don’t see it on a day to day basis, it seems to hit more regularly than in the past, with freakish events, colds snaps, warm spells and snow storms in April. And on this occasion, it had me thinking about our current environment in payments. We are seeing a fundamental change to our ecosystem with technology advancements like Open APIs, big data, AI and foundational changes like Immediate Payment initiatives and regulatory pushes.
For the most part, the average consumer won’t notice the shifts happening on a day to day basis because they don’t change their habits. Maybe it’s an occasional new app or dipping their card in the POS terminal verses swiping, but slowly and surely, those habits are changing, just like the warming climate, however they don’t happen all at once—it’s an experience and if that experience is enjoyed, they do it again and again until the habit is formed (or in the EMV example, they didn’t have a choice, the swipe was no longer accepted). The changes that seem small or insignificant at the time, as a new app launch or new tech startup offering a new way to pay, can quickly take over and make the old way of transacting slowly obsolete, just look at what is happening to cash in a place like the Sweden. What seemed impossible 3 years ago is now a real reality, cash is not king, in fact, it is barely accepted.
The fundamental foundations of the ecosystem are changing in payments, the central infrastructures are being modernized to reflect the real time reality in which we live—24x7x365 always-connected always-available. With those foundations being laid today, it only stands to reason we are at the beginning of our warming trend, tomorrow’s reality won’t look like today’s reality, and much like the warming climate has created weather patterns that aren’t recognizable in the traditional sense, April is supposed to feature showers that bring me May flowers! A payment at the POS used to only be in cash or card; now we have mobile, direct from account and who knows…maybe even a wink and nod will do soon.
The changes are happening, and unlike the climate warming, we not only are welcoming the changes we are seeing in payments, we are cheering them on, because each leap and bound forward will get us to a more secure and inclusive payments environment, which in the end benefits all of us—lower fraud, lower transaction costs to consumers, quicker advancements in technology, etc. These are all things that create great new experiences and opportunities. And unlike actual climate change, which is moving (or melting or shifting) things that are measured in years and decades, we are measuring changes in weeks and months! So change is certainly blowing in, and I hope spring and summer aren’t far behind!
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