The Future of Payments

When I was working at Citi Cards, I was under the impression that people were spending a lot of time figuring out what credit cards they should have. Were they going to get points or miles? Weren’t they going to be so excited that they could redeem their points with Amazon? Of course, working in a credit card company I was thinking about this all day and I lost sight of the fact that my customers had far better things to do with their time.

That’s why the Pymnts.com study on How We Will Pay caught my eye. The study highlighted a couple of key numbers I hadn’t thought about:

  • 61% of shoppers don’t enjoy the act of shopping
  • 66% of consumers would use a connected device to enable a seamless shopping experience

In short, most people don’t like shopping and find payments an even worse pain to deal with. The future of payments isn’t about making payments cooler (a la Venmo) it’s making them invisible. My friend Ashwin Shirvaikar described this as Internet of Things Payments in his section of Disruptive Innovations V.

But what does a future of transparent payments look like? Some examples are:

  • Uber already integrates payments seamlessly into its app. You don’t think about “paying” for an Uber. You think about booking a trip and the payment is part of that. It’s like express check out at a hotel.
  • Slice On-demand Insurance is an insurance platform for the “Gig Economy.” Slice provides insurance to Airbnb hosts and Uber drivers only when they are providing services. It integrates seamlessly into the buying transaction by providing insurance any time the host takes a reservation.
  • Parkmobile, a leader in mobile parking, has developed an integrated parking solution with BMW.  When parking at a Parkmobile enabled location, drivers will be able to begin a parking session directly from their dashboards without leaving their car to pay a meter. The parking session is terminated once the driver leaves the spot. 

But who should develop the future of payments? The Pymnts’ How Will We Pay survey asked this question to consumers. Interestingly enough, the top named company was Amazon.

The Pymnts’ How Will We Pay Survey. Note: Super Connected Consumers Have 6+ Devices That are Not Laptops, Smartphones or Tablets

So why does Amazon come up so high on this list? Because customers want an innovative shopping experience, not an innovative payments experience.

The best example of this is Amazon Go. Amazon Go is a prototype payments experience of the future. Customers go into an Amazon Go store, pick up their items and leave. Checkout is performed automatically when the customer leaves the store. While there are currently some issues around the price to create these stores (automation being more pricey than human labor) and theft due to shoplifting, this is a good view of the future of payments.

While those working in the payments industry think about payments all day, consumers see payments as an inconvenience. Some services like Parkmobile and Slice are already providing great payments integration. In the future, companies will be providing truly integrated services like Amazon Go.

Growing Up Alexa

A few months ago, I wrote about how Alexa and Google Home are used in our house. In my experience, these devices are a better way for kids to use the internet than a mobile phone. A phone becomes an extension of a person, isolating her from the group. Interacting with Alexa is more of a family activity with Alexa acting like another person in the room.

Some people think it’s odd to treat Alexa humanely. As a machine, she doesn’t have any feelings. But think about the way we refer to Alexa. It feels more natural to refer to Alexa as a “her” than an “it” because that’s the way we interface with her. And if we interface with her as a person, we should be polite and say please and thank you. Continue reading “Growing Up Alexa”

Almanac – Some Random Rules of Thumb I Like

In ancient times, people had wisdom, aphorisms and rules of thumb they would put into Almanacs. In the current lingo, they’re called mental models.  Here’s a list of some of my favorite bits of knowledge from around the web — some because they are useful, others because they are just fun.

  • Baader-Meinhof Phenomenon — The feeling that something you just learned about seems to appear everywhere
  • Bechdel Test — A method for evaluating the portrayal of women in fiction taken from a comic from Alison Bechdel from 1985. The test states that the movie has to have at least two women in it who talk to each other about something besides a man
  • Betteridge’s Law — Any headline that ends in a question mark can be answered by the word no. There’s a great Betteridge’s Law Twitter feed
  • Dunning-Kruger Effect — The term comes from the article “Unskilled and Unaware of It: How Difficulties in Recognizing One’s Incompetence Lead to Inflated Self-Assessments.” It’s a scientific description of someone who is too dumb to know it. Here’s John Cleese with a video explanation
  • Godwin’s Law — As an online discussion grows longer, the probability of a comparison involving Hitler approaches 1. Said differently, if an online discussion (regardless of topic or scope) goes on long enough, sooner or later someone will compare someone or something to Adolf Hitler. The corollary is that the thread immediately ends and this person loses the argument
  • Goodhart’s Law — When a measure becomes a target, it ceases to be a good measure. Anytime a metric becomes a target, people will try to game it
  • Hanlon’s Razor — Never attribute to malice that which is adequately explained by stupidity
  • Occam’s Razor — In short, Occam’s Razor says that the simplest solution is most likely correct. Formally it says, “When presented with competing hypotheses to solve a problem, one should select the solution with the fewest assumptions.” Though they’re historically unrelated, I tend to think of Occam’s Razor with the Gordian Knot. This was the story of Alexander the Great who untangled an impossible knot by cutting it with his sword. I always think of Occam’s razor as the act of cutting the Gordian Knot