What’s Next In Payments?

Oh, what a five years it has been!

On October 20, 2009, Warren Buffet (via a recorded video interview) helped us launch a new way to talk about “What’s Next” in an ecosystem that was just beginning to pay attention to the power of the mobile device, the cloud and data in transforming how consumers shopped and paid for their purchases.  That mantra was one that MPD’s Founder, David Evans, had been talking about for a  while and introduced formally to the payments community on September 15, 2008 at a Brookings Institution forum on emerging payments. The occasion that day was to celebrate the 50th anniversary of the launch of the American Express charge card. After Ken Chenault delivered his address, Evans described a world that would be forever changed by the mashup of these three powerful forces.

Today we celebrate not only the 5^th birthday of PYMNTS.com but the launch of a mobile payments scheme that has helped to galvanize and make very tangible that conversation: Apple Pay.

[By the way, if you think that organizing dozens of merchants, the major card brands and hundreds of issuers was tough to pull off, you have no idea how hard it was for Apple to coordinate their launch with our birthday.]

Thinking back to the launch of PYMNTS.com five years ago, I’m reminded of just how different our focus was from everything else that was in the space covering payments at that time. It’s amazing to think that only five years ago, the news about payments was dominated by stories on what “flavor” of card the card issuers were introducing, what new rewards partners they were signing up, and what the networks were doing (or not) with interchange rates.

There wasn’t much, if anything, in the media at the time about the innovators who were looking at and using mobile, the cloud and data to change the world of payments. No one ever talked about the blurring of the on and offline worlds and how it would transform retail and commerce.

Or how important digital accounts would be to the future of commerce.

Or how software platforms and apps and ecosystems – not hardware – would drive innovation in payments and commerce.

And how the players who could knit all of that together would be the ones to win the day.

We saw an opportunity to give those innovators a voice, a way to tell their story, their way. Interestingly, the innovators we profiled that day – the new guys as well as the existing players with new ideas – are all still innovating (even though some of them have been acquired and are now part of larger organizations.)

But giving innovators a platform to talk about how they were changing the status quo in payments wasn’t the only reason we launched PYMNTS.com.

Our work in this space convinced us, unequivocally, that mobile, the cloud and data would redefine the payments and commerce experience. You know the old Wayne Gretzky quote about if you want to win, then skate to where the puck is going not where it’s been? Well, we knew that the future belonged to those who saw where the payments puck was going, and we wanted to give visibility to their ideas, their perspectives, and their vision for the future of payments. We were skating there and we knew from the work that we were doing, so were a lot of innovators.

So, off we went.

When we got started, Jack Dorsey and Square and mPOS was just getting started too. In fact, he was one of the first innovators we interviewed. Now mPOS is on its way to being “just POS” as mobile devices are being used not only as card accepting devices for merchants that have never had them, but by the largest retailers who want to deliver a more personalized consumer experience. Today, PYMNTS.com tracks and rates more than 140 players in the space and provides monthly updates on where this part of the ecosystem is going and have talked to dozens and dozens of innovators who are transforming this space in unique and interesting ways.

And, speaking of people we’ve talked to, we’ve had the good fortune of talking to the most innovative minds in payments and commerce. We’ve broken news and made news with the CEOs and founders of the most promising new ventures and the captains of industry who have guided the future of payments over the last five years and who have placed their own big bets on where’re they think the next five decades will take us and them.

We’ve also shared our own points of view about the future, perspectives grounded in our work in the industry and the “economic DNA” of the two-sided market methodology we use to understand and deconstruct the complicated two-sided nature of payments and commerce. That methodology was pioneered by Jean Tirole whose work on two-sided markets among other things was recognized  by the Nobel Prize Committee when they awarded him the 2014 Nobel Prize in Economic Sciences last week. [We thought they were going to wait for our birthday to announce but they jumped the gun by a week.]  We think it gives us a rigorous but pragmatic approach for evaluating this innovation, comment on it and, hopefully, start conversations about it around the payments ecosystem.

It’s why we think bitcoin is overblown,  why Google Wallet was doomed from the get-go, why Clinkle and Coin weren’t ever going to be serious contenders, why Softcard/Isis should be put out of its misery, why CurrentC/MCX has a tough slog ahead of it, why acquirers are at risk of becoming dumb pipes unless they change, why issuers should (with a few exceptions) should give up on having their own mobile wallets, why digital accounts matter a ton, why terminal manufacturers ought to milk the asset today and look for new things to do come next decade, why Apple Pay will probably have as much of a slog as every other new payments scheme even if it is Apple, why consumers will decide how this whole thing shakes out, why the things that wrap around payments is what will get those consumers to adopt a new way to enable those transactions.

And why, in spite of all of the amazing innovation that exists, payments is really hard and change will take time.

Looking ahead at the next decade, we also know that this year, 2014, was another inflection point in payments. The relentless string of cyber-attacks starting with the Target breach, the move to EMV in the US, launch of Apple Pay, the massive diffusion of the mobile phone worldwide, the emerging middle class worldwide, Alibaba IPO, and pending spin-off of PayPal will make the road ahead much, much different than the road we’re on now. Looking back, nothing will ever be the same.

Five years later, we’ve changed too.

PYMNTS.com is now a team of more than 20 people, two daily newsletters that we produce 6 days a week, several offline events (including The Innovation Project which this year will knock your socks off for sure so mark your calendars – March 18-19, 2015) and big plans for the future.

But what we value most is our good fortune to be able to travel the road about innovation in payments and commerce with you. We’re truly grateful for your support, the insights you bring to our readers, and the sense of community you bring to our work. Five years later, like a lot of innovators in this space, we feel that we’re just getting started. And we can’t wait to see where the journey we started five years ago takes us and you and payments and PYMNTS.com.

Thank you, again, for all that you do to make what we do so interesting and worthwhile.

And Happy Birthday PYMNTS.com!