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Intersections Of Payments — Day 1

Innovation Project 2015 heads into Day 2 today (March 19), as Day 1 wrapped up a series of stimulating conversations focused on this year’s theme of “Innovation At The Intersections.”

In case you were’t one of the payments innovators in the crowd at the event held in Cambridge, Massachusetts, at historic Memorial Hall, here’s the conversations you may have missed: World Wide Web creator Tim Berners-Lee on how the Internet changed the payments ecosystem; a conversation on how companies are meshing data, digital and payments to drive commerce forward worldwide; how innovators have “cracked the code” on converting shoppers into buyers; and a lively debate about whether omnichannel is the future of retail and who best understands the concept. Oh, and the day’s discussions got into how using mobile apps can drive customer acquisition and engagement. 

And that was just Day 1. 

The Innovation Project brings together established players, emerging disruptors, and entrepreneurial visionaries in the world of payments and commerce. And through this year’s theme, that group discussed how payments and commerce is at a crossroads, moving from one particular way of thinking and doing innovation to another. So what specifics did Day 1 get into? 

For one, we learned that (according to IDC), the Internet Of Things market is expected to hit $7.1 trillion by 2020. And that global eCommerce is expected to reach $1.7 trillion this year, but mobile still only accounts for a sliver of that ($300 million). While eCommerce makes up about 10 percent of all commerce, mobile commerce still is only 1 percent of all commerce. 

But that statistic should shift as the concept of smart commerce evolves. This involves taking mobile devices, adding in the Internet of Things and meshing them into payments platforms — that’s what smart commerce is about, one of the panelists at yesterday’s Innovation Project concluded.  

What else could be concluded from gathering a group of payments experts into one room? That people expect seamless ways to pay without thinking about how to pay. It’s the “Uberization” effect of the payments world. People want fast, efficient mobile ways to pay, but they don’t want to think about the payment aspect of how it’s being done. The device, in turn, becomes the payment vessel, and the customer gets to send money without having to do much more than click a few buttons. 

Still, as the industry has seen with Apple Pay, Google Wallet and perhaps soon – Samsung Pay, most consumers still aren’t instinctually using their phones as payment devices. How do we change the habits of consumers to make them use those devices to pay? Panelists at the Innovation Project would tell you many variations of one common theme: “the experience has to be ubiquitous,” one payment expert uttered at yesterday’s event.

Consumers are looking for frictionless payment experiences, but they are also looking for their data to be secure. Most companies that deal with payments want the same thing when it comes to reaching their customer base, but they aren’t always on the same page about how to get that. Or how to pay for it — a theme of the day. When innovations need to be integrated into the industry, who’s going to foot the bill to benefit the masses? 

Will it be the issuers? The banks? The merchants? Or the innovators? Surely, not even the panelists at Innovation Project could solve this one. For innovation in payments, as the conversations yesterday concluded, it isn’t always about solving one, or even two, problems. It’s about laying a foundation for the next 20-30 years so that innovations can build upon themselves and continue to intersect. 

That’s what the speakers at Innovation Project attempted to stress yesterday. It’s about finding a “holistic security solution” one panelist said — whether that is EMV, tokenization, or even something that hasn’t yet been invented. Hardware choices don’t have to revolve around NFC, one speaker suggested. 

After all, today the payments industry is about the “coming of age of the digital wallet.” It could be one standard, it could be a combination of a few solutions — the jury is still out on how to bring the payments and commerce industry under one standard. But one person must not be forgotten in all of this, one panelist suggested; the consumer — the person payments leaders spend their days and dollars trying to convince to use their service or product. 

“Payments and technology is converging like never before. Traditional and new players,” another panelist said. “Comprehensive commerce solutions. Commerce isn’t just about buying and selling — it’s about relationships between people and thing and how we interact.” 

So what does the future of payments entail? 

“Future of payments is open, scalable, non-proprietary systems,” sprouted off one speaker. And to win in this space, the big players must work together to bring about simplified payments innovation. And all of a sudden, payments gets pushed to the background. 

And one question left on the table after Day 1? Who will break down the barriers to bring about affordable and secure payments systems that protect consumer data while providing them with the speed and convenience they demand?

Will it be the banks? The merchants? Or the innovators? That’s what we learned from Day 1. That the future of payments innovations isn’t possible without incorporating the views from each side. 

 

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