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.