When I was a kid payment was simple. I earned $5 for mowing the lawn. My Dad opened his wallet and gave me a $5 bill. I would hop on my cherry red, white banana seat Schwinn bike and ride to down town Lake Ronkonkoma and deposit my cash in the local Bank of New York on Hawkins Ave. Sometimes I would be tempted by Yellow’s or the Bakery, or Agnew & Taylor Hardware (if I was brave enough to make it past all the older guys standing around the front steps.)
I worked an honest day, earned an honest dollar and put it away for a rainy day.
Fast forward 40+ years and the concept of payment have changes, and what work looks like has evolved too. My Dad worked for GE for 20+ years and then a small Dutch tech company running their US business until his death. Now we live by “gigs” or “projects” and pay for effort looks different by the project, industry and time frame. Most people have worked for 5 to 8 companies and many others even more.
The only constant is change.
I stepped into the payments world in 1991 not out of the burning desire to “touch the transaction stream of currency” – instead it was out of necessity. I had always found myself in a technology based business, from Chemicals to Semiconductors, Magnetic Resonance Imaging to early hydrogen fuel cell tech. As I sat in my office at Maritz in Fenton Missouri tasked at growing a business, the Exclusively Yours Cheques, from $20 million a year to something higher. It became clear that printing our own money (the EY Cheques) had great benefits in cash flow and profit, but was challenging the collection and management of the paper. At the start the focus was making the paper currency more secure, faster processing with bar codes and high speed printing. Which all worked (even having on reserve at Standard Register $20 million of checks that could be in our hands within one business day.) We grew to $100 million in 8 months. The problem only became worse, because of the physical paper (paper out, paper in, etc.)
My entry into electronic payments.
On my little white board in my office an idea took shape on how to get rid of the paper. We wanted control of the transaction – where, when, how much could be used. Timing and necessity is the mother of all invention. I pulled together a small band of teammates (not one of use understood this transactional world) and we made an amazing thing happen. We created the first prepaid, first stored-value, the first gift cards on the planet. Not only did we receive patents, we launched a successful new business at Maritz and in the whole rewards, loyalty, and payments industry. From that little white board and markers a = $100 billion industry was born. All new revenues, new uses for payments (taking from paper money and checks). Today, when I go to a check-out line and see all the gift cards and prepaid cards I laugh and think “they have no idea where this all started…” (I now wish I had patented the J-hook prepaid card packaging we invented back then too).
Why did I share this story? It is only part of the full picture.
1991 we said “it is not the card, it is not the plastic” – and in time people would fall in love with the plastic and the swipe at the Point-Of-Sale. I knew then as I know now, it is not the plastic. Next was the internet, and everyone became fixated on the web and payment by the web. Again, it is not the plastic, not the chip card, not the web, now mobile. When building out the first debit, stored-value, prepaid and gift card offerings we looked at it as a membership, as access to the things consumers and award earners wanted. Ease, Choice and Value. The leadership at MasterCard, Boatmen’s Bank, FDR, Maritz and later American Express trusted me, us, to build something more, be focused on not the means of payment but the experience and result.
Rapid change underway, the hardware of payment is about to become meaningless.
From early on in my product and marketing career I had this weird ability to see the end product, the end result of the “what was in development.” From the packaging, to the whole customer experience. When my kids were about 7 years old I took them to a Macy’s at a big mall. We went to the highest level in the store and looked out – you could see miles of merchandise and in the distance the mall shops going off into the distance. As I knelt down to their eye level I said “girls look at this, you are looking at the end of an age. In your lifetime this will no longer exist and if it does it will be something so different we can’t even conceive what it will be.” Within a few years we saw the birth of Amazon.
What I see next in payments?
As the world of robotics, artificial intelligence and the rapid replacement of living organic humans in many jobs we will see a shift in many old world businesses. Merging and purging, shifting and reformulation of the basic thinking on income, purchasing and payments. Imagine a shopping experience that ends with you loading groceries in your self-driving vehicle (or Uber driverless loan car) with a conversation between you and a fully aware cyborg that knows everything about you (your work history, income patterns, credit rating, assets, debits and more) along with the ability to use 10 points of reference to confirm you are who you say you are (facial recognition, DNA from your breath, earlobe confirmation, voice pattern, height, medications you are on etc.) on the spot “Checkout Chuck” asks how you want to pay? With choice from credit, to selling micro investments, to future income, to assets you hold and borrow against them – each and every transaction will be an instant assessment of a person’s lifetime income, assets, investments and value. You say “Chuck draw down my loyalty program currencies to cover half of the cost and the other from my next week’s income” and you are off. Imagine buying a home while standing in the home, and so on. Instant and always on access to what you want in the most secured way possible.
Payment will not be a thing, a swipe, a tap or any of that – instead it will be a conversation allowing you to do what you want, when you want and the way you want (heck you might not even want to go to the grocery store… instead your fridge will ask what you want for dinner and a 4D printer will combine the proteins, enzymes and elements of your meal that night).
Future innovation comes in planks.
Each advancement in technology, manufacturing, industry is built on the backs of those before us. Yes leaps happen, but it is hard work no matter where and how a new thing comes into creation. It is all speeding up. So while today we think about mobile payment, wireless payment, tap and pay via your smart phone this too shall pass. Think what next, and start with the end in mind – the what is the desired outcome of the consumer. I can tell you it’s not 20 forms of plastic, or 15 apps, or fobs, or chips. The consumer wants to live the life they imagine, they want access to the things, the experiences they want and payment is just an means to an end. The future might be no payment payments.
So, yes mobile pay, chip cards and all the other new payment apps on the way are part of the next stages of payment, but they are all just planks in what comes next.