Black Swans Are The Sandbox Of New Innovations

i2C - Black Swan

Jim McCarthy, i2c president, says disasters often breed innovation. “Telecommuting, online education and moving to a cashless and virtual financial system will likely become the norm,” he told PYMNTS. “This most recent black swan is proving that online financial services are a lifeline service.”

The following is an excerpt from Black Swan, contributed by i2c President Jim McCarthy.

Black Swans Are the Sandbox of New Innovations

At the time of the black swans in 2001 and 2008, it was hard to tell anything positive was coming out of them. That’s the nature of these events. A few innovators do come forward with good ideas, but often the environment can’t support them past the short term. The business model isn’t completely figured out, or the technology to support it isn’t there, or people aren’t ready socially.

But the lesson is to not despair. While it may take years, these good, innovative ideas often resurface when the time is right. They are reworked and they take off. That’s what’s happening now. Thanks to the world of digital and mobile commerce we are living in today, we have the necessary tools to survive during a time when businesses and schools are closed in the U.S. and across the globe.

Let me share an actual example. Back in 1999, at the advent of the internet bubble, I had just joined Visa USA and got recruited into a new organization that was created to respond to the changes occurring around us. I became part of e-Visa, an organization tasked with making Visa USA an eCommerce innovator. We built some of the first eWallets and online marketplaces. We even created the ability to use chip cards in a USB-attached chip reader to form-fill and send EMV-like payment information to merchants across the internet.

But when the dotcom bust happened in 2001, our innovations also died. A few innovators thrived – and some, like Amazon and PayPal, have gone on to reshape commerce as we know it today. But for the rest of us, it seemed these were all bad experiments. In hindsight, it turns out they were critical first steps. Today, marketplaces dominate the eCommerce landscape, and mobile devices have made myriad wallets, from Apple Pay to WeChat Pay, almost ubiquitous.

That brings us to today’s black swan event, the COVID-19 pandemic. As I write this, I am living under shelter-in-place guidelines. As a family, we are supposed to stay in our home for at least three weeks, maybe longer. And much like in the past, I am thankful for the innovators who are making this difficult period more reasonable. From high-speed wired and wireless internet; to digital content providers; to the app and gig economy that connects the digital world to my front door; to the messaging services that connect me to friends, family and colleagues around the world – I (and even more so, my kids) can’t imagine how this would have unfolded without these innovations. Financial services have improved markedly, as we can now use our mobile devices to deposit checks, pay bills, set controls, get alerts and even avoid handling cash. Even those communities that are unbanked or underserved can choose to receive their Social Security and veterans benefits through reloadable, prepaid cards.

Clearly, this isn’t to say there won’t be negative effects as a result of this black swan. We are already seeing its effects on airlines, hotels, malls, restaurants, entertainment and sporting events. As a country, we will all need to rally around small businesses and support the gig workers who will inevitably come under stress as people stay home.

However, the impact of the current crisis will not change the fundamentals of our digital economy — if anything, it has made it an even more important part of our lives. Our GDP, the financial markets and key industries will recover over time. I expect that some of the early social experimentation we’d been seeing before the announced pandemic with telecommuting, online education and moving to a cashless and virtual financial system will likely become the norm. This most recent black swan is proving that online financial services are a lifeline. If you didn’t have a card before, you’ll probably want one now — at least a virtual card as a funding mechanism for the continuity of your life online.

Just as with past black swan events, this one will launch new ideas, create new opportunities for innovation and hatch new, successful business models that we will come to accept and that will improve the human experience.

Read more insights and tips in Black Swan from PYMNTS.



The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.