Top Five Themes at Money2020
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I am finally starting to catch up on things back after the intense week at Money2020. Congratulations to the Money2020 team for pulling off another impressive event! With 4,000 people attending, the energy and excitement was palpable. With opportunities to network and so many sessions going in parallel, I only got a chance to attend a fraction of what was on offer. Having had a bit of time to reflect, here are my personal top 5 takeaways: 1. Digital wallets are starting to come of age. With interesting announcements from PayPal, Isis and a number of other players, it is clear that now everyone agrees that it's not about the underlying technology (e.g. NFC vs QR codes), but about customer and merchant adoption, which requires clear benefits, simplicity, and ubiquity. My view is that of the leading contenders (PayPal, Isis, Google, scheme wallets), PayPal is showing the most promise today. It's concept of checking-in is simple to understand, the check-out does not depend on a specific technology (the code can be scanned or entered) and last year's deal with Discover gives PayPal ubiquity, at least in the US. 2. MCX is more real than many people think. The panel of merchants representing the MCX initiative received a mixed reception from the attendees. However, they did say more than they have ever done in the past and where they didn't say too much, it was possible "to read between the lines." Two of the most common questions to MCX are 1) how will they attract consumers? and 2) are they building a new payments network? For #1, MCX is looking to leverage the relationships they already have with millions of customers through their loyalty programs and private label cards. And if the offer is compelling, who is to say the customer won't be tempted to download the app and give it a try? Those same private label cards will also be a starting point as a funding source, although MCX are also believed to be in discussions with banks to connect directly to the bank accounts, and through FIS they have a technology partner capable of helping them navigate the technical complexities. As Wal-Mart representative concluded, "do not confuse the lack of announcements [from MCX] with a lack of progress." 3. Tokenization is going to be a big topic over the coming years. On October 1, Visa, MasterCard and American Express introduced "a proposed framework for a new global standard to enhance the security of digital payments and simplify the purchasing experience when shopping on a mobile phone, tablet, personal computer or other smart device." A card number would be replaced by a token, which would be used instead for shopping online or on a mobile. The US banks have already started a similar effort via The Clearing House, and in my view, the announcement from the three networks is a direct response to those efforts and an attempt to influence the developments. Despite multiple panel discussions at Money2020, not many details are available at this stage how all this will work, but it's obvious that it is a trend to watch. 4. Card-linked offers remain exciting while entering the next stage of development. Events like Money2020 are great at bringing the entire ecosystem together: issuers, payment providers, merchants, investors, analysts and others. Card-linked offers and transaction-driven marketing continue to excite different parties with their promise and the event had a number of intelligent panel discussions, acknowledging the fact that no one party has full access to the necessary data and recognizing the need to collaborate creatively while respecting customer privacy. I had the privilege of moderating one such panel discussion among the representatives from Affinity Solutions, Home Depot, Speedeon and Vantiv - thank you to all my panelists and to the organizers for giving us the opportunity. As a further sign of maturity, Cardlinx Association announced at Money2020 brings together companies such as Microsoft, Bank of America, Discover, Facebook and First Data in addition to most of the main platform players to tackle industry-wide issues such as stacked offers (e.g. multiple offers presented through different channels), product returns and others. 5. The emphasis in 'm-POS' is shifting from 'm-' to 'POS.' Square and others have pioneered the m-POS concept where a mobile device and a 'dongle' are acting as a payment terminal to accept the card. However, the development of digital technologies has paved the way for providers of new breed of POS systems, which are aimed at replacing traditional stationary cash registers/ POS systems. The new systems, such as Clover announced by First Data at Money2020, are cloud-based open platforms enabling to tap into the developer community for a wide range of apps that can help merchants manage their inventory, reconcile books or engage with customers. Combined with sleek hardware, they offer much more than simple payments acceptance and are likely to appeal to a broad range of merchants. I am sure I haven't mentioned everything that was worth mentioning (for example, Peter Diamandis' opening keynote was truly inspiring). If you attended the event and would like to add your observations, please leave a comment to this post.