The future of payments and technology

Andrew Vorster, Vice President of R&D
and Adam Banks, Chief Technology Officer for Visa Europe delivered a
fascinating double act at the Financial Services Club the other night.

The theme of the presentation was: the future of payments and technology,
and covered seven key trends that Andrew and Adam have identified that will
disrupt payments:

1. Compute power becomes ever more
   abundant, affordable and accessible;
2. Devices continue to evolve,
   liberating more power for more people in more places;
3. Always on, always there, always
   aware, always informed and always connected;
4. Our real lives become
   replicated and reflected in a parallel, digital universe;
5. Businesses gather enough data
   and processing power to become all-knowing;
6. The world becomes a more open
   and collaborative place in which to operate; and
7. Traditional identity management
   models become increasingly unsustainable.

Andrew gave the core of the presentation
and illustrated the impact these seven trends are having on retail payments through
the combination of compute power and ubiquity.

A good example is with Square.

Square provides such ubiquity that babysitters
are now using it.

The reason?

It enables both parties to find better
service.

The babysitter, for example, charges $10 an
hour.  The parents get home after being
out for five and  a half hours and that
means you need $55 in cash in your pocket.

No cash? 
Then a quick drive-by ATM visit is in order.

Then you get home and you find that the
babysitter had to change a diaper ($10), order food in ($15) and it’s now 00:45
so 45 minutes has been on double time ($3:75 extra).

Oh dear.

Another drive-by at the ATM on the way home
as you drop off the babysitter.

All in all, an expensive night ($83:75 for
a babysitter!!!! are you mad?  I’d do it
for $50 J ).

Anyways, the babysitters are now all issued
with Square dongles and it’s made life far easier.

The parents no longer needs to stop by the
ATMs, and it’s far more painless putting a card in a machine than seeing those
crispy new notes crossing hands.

Source: Square

Take another example: the issue of
identity.

We all know how annoying it is when your
bank declines an overseas transaction (if not, read about the last time it
happened to me).

Andrew cited one UK bank spends £18 million
a year just on false positive overseas transaction service calls!

Come on, you can easily reduce this cost by
contextual based location 
identification.

Using an integration of payment and mobile,
that’s what we have today.

The only real issue is that, even with
mobile identification with geoproximity, you still have identity issues.

What if someone stole your phone and all that?

So the real issue will always be identity.

That is also changing however.

Andrew cited the fact that the FBI can no
longer create undercover agents, as criminals now check the social profiles of
new members of the hood.

If you don’t have a credible three year or
more social presence, with all the friendships, photos and stuff to prove it,
then you’re dead meat.

In fact, social media has changed
everything, Andrew underlined.

And he finished his presentation with this
award-winning ad from the Guardian
newspapers to illustrate this point.

Brilliant!

Love the video and it just goes to show how
things can twist and turn on the winds of social pressure (just look at what
happened to Andrew Mitchell, the Government’s Chief Whip over here, if you want
to see how online social can influence outcomes).

At the end of Andrew’s presentation, Adam
and Andrew took a range of questions from the audeince that included the way in which card companies are
selling data to whether contactless will really take-off to how and why there is no effective identity
management system.

All in all a good night, and one where I
pretty much agreed with almost all that was presented and discussed.

You can download the full Visa report on the
seven trends and see more pics of Andrew
and Adam in action over at our Facebook page.