"Everybody's talking and no one says a word," wrote John Lennon in his popular "Nobody Told Me," song from 1984.
Lennon, of course, wasn't talking about payments or commerce, but his lyrics sound a little like some of the criticism surrounding the payments innovation discussions when it comes to ensuring the industry follows a customer-centric model.
Everybody's saying they're focused on the customer, but are their actions backing up the claim?
Patrick Gauthier, Amazon's Vice President of External Payments, doesn't think that — as a whole — payments and commerce leaders think with a customer-first mentality, which he said is really where the industry needs to be in order to matriculate true innovation. Instead, too many are driven by the industry lingo, too focused on creating the next big thing, and too often forgetting whom their voice is representing: the consumer and the merchant.
From Gauthier’s perspective, the message is getting garbled up in the jargon of the industry — which he said has kept innovation from hitting the people it’s intended to help: those using the services and buying the products (aka, the consumer).
"Everybody will always say we start with the customer, etc., but then you hear it in the language. They use the lingo of the industry – the language of the insiders, not the lingo the consumer would use. The consumer doesn’t understand the lingo. The customer gets lost in that," Gauthier said. “I think we need to put emphasis on that. When you start from the customer and move backward and really think what it is that [the business model] needs to solve. …When you focus on that and then move backward, you suddenly find different ways of doing things."
Gauthier’s perspective was shared following a roundtable discussion with payments, commerce and retail experts at Innovation Project 2015 last week in Cambridge, Massachusetts, on March 18. The panel conversation focused on innovation in the payments and commerce spaces, speaking toward the evolving ecosystem that's disrupting the industry. But who's best suited to lead, and are the conversations headed in the right direction?
Yes and no, Gauthier said.
For example — with Login And Pay with Amazon, Gauthier said third-party merchants have the ability to see which customers are Prime members. Through the service, the merchants can offer them additional perks through their site, like free shipping. And because Prime members are Amazon’s most valuable (buying three times more than other Amazon customers, data shows), it also gives its third-party merchants a perspective of who may be the most valuable customers. That, in turn, reflects better on Amazon, he said, which creates a more well-rounded customer and merchant-centric experience.
After all, innovation can happen fast, but it's more important that it happens right, than fast — and for the right audience.
"The payments industry is still really guilty of starting from where we are and then evolving from where we are, not starting from where the customer is and moving backward from it," he said. "The day that happens — what has been a fairly more innovative space as of late — you will see a quantum more of innovation happening. It will break down the pillars of how things are done today."
That's when people will really get talking, he said, and when innovation can truly occur. So what's missing from the conversation, and what's going to help fill that gap?
Identity, and how it's shared and incorporated into the customer experience, Gauthier said. This means talking about things like tokenization, but forgetting how it impacts that customer, and talking about customers without talking about the identity of that customer.
"There is still a lot of friction on how identity is shared," he said. "There are still a lot of [companies] that portray to be open, but are actually closed. Tokenization that everybody talks about — which indeed has great potential — is actually in its current approach currently closed. It’s controlled by the few. People who are defining tokenization today are not the merchants, they are not the trust brokers. They are Visa, MasterCard and American Express. It’s the internal club. That is not the approach that starts with the customer."
What's needed instead, says Gauthier, is more conversations with outsiders, more connection to the merchant and consumer, and more conversations that have to do with what the customer actually wants. To him this means talking less about payments and more about the commerce experience. Consumers, he suggested, don't care about payments, they care about the shopping experience. They want the payments to be invisible (like with Uber, he said).
Drop the industry jargon, he suggested, and focus instead on consumer identity and the economics of where innovation comes from. When it comes to evolving the economics of payments in a mode that enables a full customer experience, it's about creating an open environment of transparency, Gauthier said, but he noted that can't happen without conversations about how to drive the economics behind innovation.
That starts with driving conversations with the right people and about the right topics. Tapping into who the customer is will open up the answer to how that consumer wants to pay, says Gauthier, which can lead to a richer commerce experience for both the business and the consumer.
"Really what the consumer and the merchants are after is a commerce experience, not a payment experience. ...We need to think a little less about payments and a little more about the people who are transacting. The reason I talk about identity and economics is because that is seminal — who I am [as a consumer] is pretty key to what I'm going to do. ...Today, the economics is very centered around how I pay. And maybe at some point the economics should be centered, or certainly migrated, not with just so much just how I pay, but who I am. The who I am, and the willingness to share who I am — what I choose to share — should potentially change the economics of a transaction."
Identity has as much to do with the commerce experience as it does to do with the payments experience. Still, more conversations center on the payments side, often leaving out what role the retail/commerce experience plays in the transaction. For example –with Login and Pay with Amazon, Gauthier said that third party merchants can provide Prime customers with VIP treatment on their websites. For instance, AllSaints is providing Prime customers with free shipping when they pay using Login and Pay with Amazon on AllSaints.com. That, in turn, creates a more well-rounded customer and merchant-centric experience.
And, that's what people in the payments/commerce spaces should be talking about, he said.
Gauthier believes that the conversations have certainly started to move in the right direction, saying that five years ago the same talking points weren't even on the table. The technology of how things are constructed, he said, has moved rapidly, but said the "underlining business concepts need to catch up where payments is concerned."
But that isn't an easy feat for the industry that sometimes faces resistance and conflicting perspectives on how payments and commerce should be meshed into the consumer experience.
"The tension here is going to come from the fact that commerce innovation is outstripping payments innovation — completely outstripping payments innovation," he emphasized, citing Uber as an example. "That's where we need to go. Sometimes I think we're too hung up on how we are going to do payments and tokenize credentials that we lost sight of the consumers in the conversation."
That's where Gauthier says more voices and perspectives are needed.
"The [retail] industry needs to embrace customer-centricity in order to really get to what it can be in the next 10 years. Sometimes it takes outsiders that are doing something atypical," he said.
Clearly, there's no shortage of voices in the payments, retail and commerce sectors, and there is no shortage of leaders with innovative perspectives. What may be needed, however, is a conversation about what people are really talking about and who they are talking about. Is it for the company, the consumer, the merchant, or for the industry as a whole? Everybody may be talking, but is everyone saying the right words?
That's up to the consumers, ultimately, to decide.