Posted by: Leilani Doyle
I always look forward to the annual predictions about the changing payments landscape from Glenbrook Partners. Not only do the analysts at Glenbrook have a great insight regarding what is real and what is hype in the payments space, they also factor in what is practical given the current landscape. So, I found myself a little shocked when the first theme Carol identified in her 2014 payments crystal ball was CHAOS.
Chaos was not the first projection that came to my mind when I thought about payments, but perhaps that is because I grew up in the tidy payments industry that is dominated by a few key players and regulatory organizations such as NACHA and ECCHO. However, the more I contemplate this concept of Chaos in the payments space the more I realized that Carol may be on to something.
The past five years we have all watched as new mobile payment startups tried to disrupt the status quo only to find themselves folded into the existing payments infrastructure, either card-based or ACH-based. And where has this gotten us? Nowhere except further behind the rest of the world when it comes to real-time payments and increasing electronification of payment related information. So maybe we are on the verge of Chaos as consumers and businesses grow tired of waiting for our existing payments systems and networks to get with the program.
Another prediction I found especially insightful was the theme of EASIER. Not only because it aligns nicely with my own passion to make payments “insanely simple”, but because making payments easier will be the key catalysts for change. Carol accurately points out that the payment industry has been focused on faster, better and cheaper, but forgets entirely about easier. Just look at the success of PayPal and Square. Neither of these business models are necessarily better, faster or cheaper, but they are definitely easier, especially for small businesses and consumers.
Carol also touches on the themes of EMBEDDED, OPEN and FASTER, all of which are part of making payments easier. There are some intriguing concepts about in-store shopping experiences and how to translate these into a broader market that make for an interesting read. The closing theme was SECURE, which anyone in the payments industry knows the importance of security. I do agree with Carol on the push model concept. In fact, I have been an advocate of the credit push model for payments since my early days on the NACHA Internet council back in 1996. The major problem with the credit push model is that it’s just not EASY to implement on a broad scale given the existing US payments infrastructure. But who knows? Maybe some enterprising software company with a passion for simplicity will solve this problem in 2014.
You can read the full blog post here http://paymentsviews.com/2013/12/22/the-state-of-payments-2014/