PYMNTS consulted 21 payments executives from across the industry to share their insights on the biggest takeaways from 2016 as part of the “Payments 2016, The Year Of…” eBook. We posed the same question to each executive:
If you had to answer the question, Payments was the year of …, how would you answer, and how does your answer change your world — and the world of payments, more broadly?
Here is the response from Tomas Likar, vice president of strategy and business development at Hyperwallet…
Payments 2016: The Year Of The Gazelle
The cheetah is the fastest land animal in the world. Clocking in at upwards of 70 miles per hour, a cheetah could get pulled over for speeding on some highways. Of course, this evolutionary advantage didn’t happen by accident. Gazelles, the cheetah’s favorite prey, can eclipse speeds of over 60 mph. Sure, it’s not “cheetah fast” — but without the gazelle’s incredible speed, the cheetah could stroll around the African plains at a leisurely 50 or even 40 mph.
The cheetah wouldn’t have had its reason to evolve.
Some observers might remember 2016 as the year that new, faster payment technologies truly began to take hold. And it’s true: Over the past 12 months, emergent payment methods — Same Day ACH, Visa OCT — have become far more commonplace, enabling the flow of money between businesses and individuals faster than ever before. But before we proclaim this the Year of the Cheetah, I think we ought to consider exactly why quick funding became so important in 2016. Why now?
Let’s not forget that fast, even real-time payment methods have been a reality for years. PayPal, Venmo and other consumer wallets can move funds between wallets instantly, but these funds have always been tied to a closed ecosystem (e.g., available for spending with PayPal merchants). Ultimately, users want open ecosystems and global acceptance — and that’s where alternative payment mechanisms, such as globally accepted prepaid cards, are making their impact. The real-world benefits of something like instant prepaid card payments should be obvious, but until recently, there haven’t been any compelling use cases to justify their implementation at scale.
That changed with the emergence of the gig economy. Digital marketplaces and on-demand business models presented themselves as a frictionless alternative to traditional work arrangements: quick, easy-to-use intermediary platforms that could instantly connect buyers and sellers, doers and don’t-ers. But that promise of a seamless UX must implicitly extend to the payment processes that facilitate these transactions. Suppose I’m an on-demand software developer and need to wait two weeks for my earnings to come through. Remind me: What’s the incentive to participate on your platform?
Over the past year, we’ve seen what happens when companies don’t have a good answer for that question. As the gig economy has swelled and options for both supply- and demand-side users have grown, individuals have become more scrupulous when determining which platforms deserve their loyalty. We needn’t strain ourselves to think of a digital marketplace that has been shunned by users (and drawn the ire of investors) for failing to deliver on the essential agreement that we all made with the gig economy: Make it simpler; make it faster.
Other gig companies, striving to come through on that promise and stand out amongst the crowd, used 2016 to address UX on two fronts. First, they found new opportunities to embed value-added services and justify their presence in the supply chain. Second, they looked for ways to increase the speed of their payment flows — both to improve user satisfaction and to increase platform activity and ultimately drive revenue. But without shifting expectations and user demand for speed in all things, the gig economy wouldn’t have had its reason to evolve — and neither would we.
So let’s not remember 2016 as the year that payments got faster. Instead, let’s remember it as the year that payments got a reason to get faster. This wasn’t the Year of the Cheetah — this was the Year of the Gazelle.
. . . . . . . . . . . . . .