By Fabrizio Burlando Fintech executive and investor focused on payments, innovation and data. Senior Vice President, Region Head Europe, MasterCard Advisors. International FinTech executive and investor, focused on Payments, Innovation and Data. From 2013 he has led MasterCard Advisors in Europe, a 250-people boutique specialised in data-driven insights from the payments world for financial services and retailers. Alumnus of BCG, INSEAD and Yale, he divides his time between Rome and London.
If you’re excited about buying something, it’s not the payment itself you look forward to, it’s the overall experience. The feeling of walking away with a new gadget or item of clothing we’ve been thinking about is what we like to enjoy.
In today’s hyper-fast world, the act of paying takes up precious energy and time. A busy London restaurant recently admitted that waiting and paying for the bill consumed up to 20% of the time people spent at the table.
Digital payments – at least in their current infant form – don’t really differ, and are anything but consistent. The launch of tokenised mobile wallets has improved user experience, but there is still a bewildering range of cumbersome choices which have emerged in the past years, creating consumer confusion.
The killer feature for “digital payments 2.0” will paradoxically be their absence. It will be the era of invisible payments, which will save an enormous amount of time, energy and stress. Early examples of this already exist and you will have experienced them if you’ve used Uber or shopped at an Amazon Go store.
But the real push to invisible payments will be come with the rise of the Internet of Things, which promises an estimated 50 billion connected devices by 2020 according to some sources.
When Netmarket made the first e-commerce transaction by selling a Sting CD in 1994, this was the moment the internet became mainstream. Similarly, the Internet of Things will only become meaningful when devices can make commercial transactions with the outer world. Location services and machine learning will make any device able to transact in the background, just by knowing (or guessing) the owner’s intent to transact. Fridges will be ordering milk, wearable devices will be paying for entrance fees and cars will be updating maps.
Eventually though, with the exponential rise of IoT and invisible payments, security and data privacy will be two of the most critical issues we need to engage with. The scope of these however, will be much larger than payments. Connected devices are already all around us. They will indeed run through the backbone of our society and cannot be left hostage to criminal attacks. Car brakes will have to be protected from remote hacking and anyone will have to be in control of their highly sensitive health data, to name a few examples.
Unlike today’s centralised “cloud-based” services, vulnerability in IoT is mostly pushed to the edges, making it remarkably similar to the problems faced in payments, where the fight against cybercrime is rooted in the industry; payment technology companies have today a range of proven solutions (ranging from biometric, machine learning and location-based services) much of which are invisible and can provide a seamless experience to the end user.
Since the Internet of Things is likely to be the main catalyst for the growth of the new improved commerce experience, payment technology companies must be at the forefront of the Security of Things, supporting industry players to ensure that the overall experience with connected devices is seamless and fully secure by design.