A More Perfect Union (With the Consumer)

What's Next In Payments®
3:13 PM EDT January 5th, 2012

We the consumers (or of retail payments and the social sphere)

We live in an increasingly digitalized world. Undisputed! The amount of information available to each and every one of us at all times has risen dramatically. Most certainly! The ways and means of expressing and sharing our opinions are ever more ubiquitous. Without a doubt! Our ongoing transformation into an ALWAYS ONLINE GENERATION will further magnify the transition of power from the supplier to the consumer and the retail payments industry ought to embrace this fact. Too far-fetched? Hardly so, if we care to take a look beyond our community’s horizon.

Presuming that the growing number of online-capable devices as well as the unprecedented usage of them in our daily interactions has turned the internet from a rather static medium into a vivid social network, we should be able to identify key properties as a systems architecture. While online users (bear in mind that your smartphone might make you one of them) are exhibiting a stronger desire to display offline activities on the net, recently promoted sharing features have amplified the potential of this content to be passed along and multiplied within an instant. This fact, combined with the tendency of complex systems towards sudden transition to qualitatively different states, has resulted in eruptions of digital opinion waves that are almost impossible to predict at that scale. And here comes the clue, consumers are, consciously or not, discovering their say in this process, following the motto: “small actions can have great impact if leveraged properly.”

Where exactly does the retail payments industry fit in here now? I argue that these developments mean exciting times are ahead, because what we are seeing with payments is nothing less than its conversion into a deeply digital and increasingly social medium itself. Indications here for are the gaining popularity of venturing into the mobile space (M-Pesa, Osaifu-Ketai and more recently GoogleWallet to name but a few), the creation of digital currency value chains/platforms (Zap, Dwolla, PayPal X) and even more revealing, the merging of payments technology with loyalty programs, location-based offers as well as social media (Foursquare, Facebook). This presents us with a unique opportunity to alter the still largely commodity-oriented perceptions of the industry and embrace the possibility of becoming a connecting factor for consumer interactions. It is consequently time to stop wondering whether the recent changes in retail payments are here to stay and begin exploring the vast terrain of newly developing social payment networks.

Coming back to where we started, there is more to be learned from looking at the behavior of complex social networks. Although it is still largely impossible to predict the behavior of such systems, we do have a remedy at hand. The best way to get a feeling for the response patterns (a.k.a. consumer behavior) in a digital world is to engage with it. Understanding the nature of change in the supply-demand relationship is of utmost importance.

It is within this spirit, that I am calling on all of us to find ways of turning payments into social messages, with the ultimate goal to form a more perfect union with the consumer.


Thomas Berndorfer is an international business consultant focusing on the creation of business models for innovative retail channels. As the founder of the Capgemini Mobile Payments Community he has in-depth experience in the application of state-of-the-art consumer technologies to create added value for enterprises.

Thomas could be reached at Thomas.Berndorfer@capgemini.com.

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