In today's world, no matter the industry or geography, if you take a channel-centric approach or don't adapt to the changing world, you'll essentially cause friction in any process and likely become extinct. Just ask Blockbuster, Kodak and Borders.
Here is where mobile payments enter the picture: as merchants face this fast-evolving digital age, they are trying to transform to catch up with these various forces and avoid becoming the next Blockbuster. Likewise, payment providers are also trying to transform into technology partners so they can service merchants more effectively through various channels in a seamless manner. Payments players that build capabilities and competitive advantages early will hold a significant edge over those that play catch-up.
A tool like the smartphone could be that linchpin in bridging the gaps between online and physical commerce for merchants and payment providers alike, in order to provide them with the tools to survive this rapidly changing digital age. After all, the smartphone is the 'channel of channels.' The device can be leveraged across physical stores, online, social media and various cloud-based apps to allow engagement via any channel, any time and anywhere.
Likewise, payment providers are also trying to transform into technology partners so they can service merchants more effectively through various channels in a seamless manner.
Too slow to keep up
But technology is growing at an exponential rate. And with each new wave of technology adoption, mass adoption is getting quicker than the one before. The breadth and depth of change is daunting, especially for the payments industry. It is not a single process but many processes from organizational culture to technology architecture to customer engagement.
Up until this point, the payments industry has simply moved too slowly to keep up. And it's not just our industry, but many industries. For example, how long have we been talking about the hype or explosion of mobile payments without any real development occurring?
In the payments industry, we solve emerging technology issues too slowly (due to a variety of reasons) and by the time we have provided a solution, the technology world has already moved past us. This means it is, and will remain, a moving target. Spending years upon years trying to figure out EMV, mobile payments, omnichannel engagement, integrated payments, etc. is just not feasible in this new reality.
Building exponential technology growth
Raise your hand if you've ever heard the phrase "technological singularity" or "exponential technology growth" in any of your strategic planning meetings. If not, I'll explain.
Spending years upon years trying to figure out EMV, mobile payments, omnichannel engagement, integrated payments, etc. is just not feasible in this new reality.
Exponential Technology Growth is "the doubling of computer processing speed every 18 months due to the fact that all technological change occurs at an exponential rate." According to futurist Ray Kurzweil, "We won't experience 100 years of progress in the 21st century – it is more like 20,000 years of progress at today's rate."
From my personal experience, wireless internet, smartphones, Facebook and Twitter were not around when I was in high school or even college. Think about how much change has occurred in just the last ten years and then try to imagine what things will look like in 2025. Will mobile devices even be relevant in 2025?
Technological Singularity "is the hypothesis that the invention of artificial superintelligence will abruptly trigger runaway technological growth." Essentially, an agent such as a computer running software-based AI would enter a 'runaway reaction' of self-improvement cycles, with each new and more intelligent generation appearing more rapidly, causing an intelligence explosion that would far surpass human intelligence.
Ray Kurzweil first suggested the idea of the technological singularity and believes that by the 2030s people will be able to upload their minds, melding people with machines. Computer Scientist Vernor Vinge predicts that singularity will happen before 2030. Elon Musk envisions that around 2030 humans will essentially be house cats to our AI-based czars unless we can develop a digital interface to boost our brains (explains why Musk is pushing SpaceX so hard). Ask yourself: When was the last time your house cat asked you to borrow the credit card?
Shaping the digital revolution
Ultimately, what these experts are telling us is that the world we live in within the next 20 years will be different, very different. And to keep up with what is shaping the digital revolution, or at least trying to grasp where it is headed, payments executives need to bring together their innovation and strategy teams to have discussions on these influences.
So what does this mean for payments? Forget quoting wild statistics and buzzwords. We as an industry need to move faster, and we need to work together if we want to move forward and remain relevant.