Innovation Project 2015 — the place where payments innovators gathered to discuss and debate about the crossroads the payments industry has found itself at — has commenced. It was also the same place where they provided their insights about which direction they think payments has come from, and where it is headed.
Just what was this year’s symposium, “Innovation At The Intersections,” really about? It was about determining how the payments industry has gotten from Point A to Point B and how new ideas, products, services and innovations can get the conversation continuing toward Points C, D, E and F. Starting off Day 2 (March 19), the Innovation Project kicked off with a lively discussion with experts from across the payments and financial ecosystem to discuss financial inclusion and where the gaps remain — despite the billions of dollars being spent to make it happen.
The one thing that’s missing from the concept of mobile money, said David Luther, CMO and EVP Business Development at Mozido, was the fact that it’s not just about mobile payments. There’s a whole ecosystem that needs to be built in order for the concept of mobile money and global remittances to be able to take off. While many mobile money schemes have succeeded — helping boost the lives of people in emerging nations — there have been just as many initiatives that have failed.
“Banks have had the opportunity for years to reach [unbanked] people but they haven’t done it. They have failed,” Luther said.
As it was discussed, one of biggest challenges in mobile money is actually about getting cash in and getting cash out. Another problem, one panelist said, is banks that pry on the poor to help boost its own products — keeping the poor poorer, and the unbanked, well, unbanked.
But the concept of being unbanked isn’t just for emerging or developing nations. Luther cited a figure saying that there are 60 million people in the U.S. who are unbanked. When it comes to mobile money in financial inclusion, one panelist suggested a ubiquitous distribution network was needed for it to succeed.
“You need a force to go in there; you need regulation to make that [mobile money] possible,” one panelist concluded.
The day transitioned from mobile money to the top innovators in payments with Market Platform Dynamic’s release of its Payments Innovation Index, or Pii360, and then continued onto panels that covered everything from alternative financing and taking on big banks to discussions from those in the industry who’ve had to make game-changing pivots to evolve their business strategies. Oh, and we can’t forget about the conversations about cybersecurity with General Keith Alexander, the former National Security Agency Director.
Alexander said the data security, in general, will get worse before it gets better — specifically looking toward the next 18 months. Cyberterrorism is only going to grow, he said, and legislation is needed in order for the government to be given the authority to step in and work with the payments and commerce industries so that breaches can be caught before they become all too common.
Progressive leaders in the field of authentication spoke about the “holy grail” of security and what steps need to be taken to get there.
“Cybersecurity legislation is a must and partnering with our allies is a must. I think we can do both,” Alexander said. “Everyone at one time will be reached.”
Moving from cybersecurity to alternative finance, the discussions turned their attention to how banks are innovating with things like Internet cafes in an effort to reach millennials. Banks are forced to keep up with regulation that makes it difficult, impossible or costly to offer the portfolio of services that they once did. Regulatory and security issues dominated conversations of the day — much like most of the industry on a day-to-day basis.
Wrapping up Day 2 involved conversations about innovators who’ve had to pivot their business models — which covered how to get employees to buy into operational changes and get them to stay enthused as innovations take shape at a company. And with any innovation, there’s going to be a rocky start. And what we learned from the conversations yesterday is that many of those who have to pivot don’t come out on the other side. Many pivot, then fold.
“It’s one thing to have the idea to pivot, It’s another to get people to follow,” one panelist commented.
And that was Innovation Project 2015: Discussion created and led by innovative, thoughtful and dynamic players from across the payments sector — the global luminaries and c-suite executives who lead the conversations on the future of payments and commerce everyday.
The Innovation Project brought together established players, emerging disruptors, and entrepreneurial visionaries in the world of payments and commerce. 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.
We learned that payments and technology is converging like never before and players in the space are seeking comprehensive commerce solutions. We learned that the future of payments may include scalable, non-proprietary systems, and that it’s going to take everyone in the space — banks, issuers, regulators, merchants and innovators to make innovation in payments hit its true potential.
Catch the rest of the day here.
Talking about innovations in payments can’t be done without discussing the technologies behind the innovations that drove the industry in the direction it has landed at today: The World Wide Web — the brainchild of Sir Tim Berners-Lee, now the director of the World Wide Web Consortium.
Even Berners-Lee said he could not predict the evolution that’s happened from the Internet to the Web, noting that it’s been a fascinating journey watching the technology grow. He kept a modest tone about himself as he took no credit for what is seen today, despite being the man behind one of the biggest technologies ever created.
And when it comes to payments, Berners-Lee said a lot of the same standards that had to do with creating the Web for open use, like HTTP and HTML, so that people could create their own websites, should be the philosophy given to the payments standards in the industry today. He advocated for a standard payments API.
Catch the rest of what Tim Berners-Lee had to say here.
Innovation Project 2015 wrapped up its two-day span (March 18-19), driving payments leaders through “Innovation At The Intersection.” This year’s theme implicated how innovation in payments and commerce is at a crossroads, moving from one particular way of thinking and doing innovation to another.
And mobile stole the show during conversations.
“More than any other, mobile is the ecosystem that has given rise to the sea-change taking place in payments today,” MPD CEO Karen Webster said. “The mobile devices that are owned by nearly every single human being on this planet, and never far from their reach — are part of an ecosystem operated by some of the most powerful players in the world. And, now, among the biggest names in payments.”
Catch more of what Webster had to say here.