Mobility and identity are often associated with payment protection, and rightly so. Every day the number of smartphone owners that use their mobile devices for financial purposes – be they banking, shopping or payment – is growing. And now that the password is being replaced by strong biometric authentication, those numbers will grow even faster, as vendors and retailers begin to see mCommerce as a viable way of understanding the consumer experience.
Smartphones and tablets are perfect for commercial innovation because of the amount of communication they facilitate. That is why it was so appropriate that Money2020’s opening keynote in Las Vegas last week featured an interactive poll, conducted live during the presentation.
Following the open remarks by Money2020 chairman Anil Aggarwal and the event’s founder Jonathan Weiner, in which they both greatly encouraged the audience to Tweet and blog about the conference, Kausik Rajgopal took to the stage to deliver a keynote on the evolution of commerce, engaging the audience and then setting the stage for the innovative discussions to follow throughout the week.
He began by holding a survey in real time, asking the audience to join him in a “live stress test” of the venue’s WiFi, presenting a series of four questions to be answered on the Money2020 app:
“The first question is: when do you believe paying with your phone in retail – by which we mean physical point of sale – will be used regularly by more than 50 percent of the US population,” he asked, revealing afterward that the majority of the audience participating answered with the year 2020 or later.
Going on, he asked, “What is the single most impactful area of emerging innovation that will shape the market in the next two years?” eventually collecting the answers: data and analytics; mWallets; and omni channel commerce.
The last two questions came hand in hand, “What players stand to gain the most from new innovation? And fourth: what players stand to lose the most from new innovations?”
To the final questions the audience named retailers, non-traditional financial service providers and marketing services as the winners, with banks, point of sale equipment providers and acquires filling out the losers’ bench.
Rajgopal was not surprised to find that the poll results fell strongly inline with the research data surrounding these thinking points, with the exception of banks losing out, remarking that the financial institutions prove to be resilient in the kinds of situations that emerge from the market disruption that mCommerce is bringing with it. They key will be to embrace innovation in the areas of mobility in a broader sense than just smartphones.
Innovation is clearly key to not only success, but also survival in the coming commercial landscape. More than 450 new payment alternatives were started between 1995 and 2005. Fewer than ten of those survive today. Rajgopal calls this QWERTY innovation, named after the standard keyboard layout that is ubiquitous across all computing and typing platforms: a standard that is too pervasive to replace.
“No one wants to take the time and trouble to learn how to type on a new keyboard,” he said, quoting a 1953 GMO report on the resilience of QWERTY style keyboards. “Especially when it isn’t dramatically superior to the one that they already use.”
“This is an observation that is entirely applicable to the payments business.”
Companies like PayPal, key winners in innovation that have built big enough to pass the QWERTY challenge however, are set to benefit greatly from the coming revolution in commerce. These players are currently developing mobile physical point of sale solutions, and established payment networks (like MasterCard) are taking cues from their success. Innovating on a large enough scale to exist in a new ecosystem, competing and cooperating so that the act of survival becomes innovative.
“As we look ahead for those in the payments business, that’s the challenge,” said Rajagopal, speaking to the need for companies to innovate on a strong enough scale to be embraced. “But the great thing about the business is that innovation is ongoing and constant.”
And with that, he set the tone for the conference: an exciting one of cooperation and competition between rival companies that are going to need to work together in order to survive in the dynamic landscape of the mobile commerce revolution. Big ideas, open innovation and clear communication have always been necessary in times of change, and the payment industry is changing like never before.