Insights & Opinions

What kind of innovation am I looking for in payments? by Andrew Vorster

Mon, 08 Apr 2019

Andrew Vorster Senior Advisor The Banking Scene

Nobody wants to pay for anything.

Sure, we want to buy things, but paying for them has literally been the last thing on our mind right at the end of the purchase process.

I’ve previously had what I consider to be as close to the retail experience as I could imagine.

It included:

- Biometric identity validation

- Personalised, context specific product recommendations and discounts

- Voice shopping assistance

- Real-time purchase threshold warnings

- Visual shopping cart product recognition

- Instant alerts

- Invisible (to me) deferred payments

And I experienced this all 40 years ago …….

No, I’m not talking about some Hollywood movie and no, I’m not a time traveller either!

I grew up in a small farming community in rural South Africa and back in 1979, my father formally introduced me to the owner and staff of the local general store and authorised me to transact on behalf of the farm.

From that point on, whenever I walked into the store with a list of things to buy, I would be greeted by name on entering (facial recognition). I would walk around and take my selections to the counter where I would be warned if I was approaching our pre-approved limit (real-time purchase threshold warnings) and the store owner would make often make a comment like “when I drove past your farm I noticed you seem to have an outbreak of weeds in the corner of the maize field — I recommend this product that worked for your neighbour — I’ll knock off 20% for your first order to give it a try” (personalised, contextual recommendations and offers). If I needed heavy items that were kept in the bulk store, I would just say out aloud what I needed and they would get loaded into the pickup truck waiting out the back (voice assistance) and when I was finished, the shopkeeper would tally up everything automatically (visual product recognition) and I would walk out with a wave (my mother settled the account on a monthly basis — which was invisible to me).

Oh — and I never once tried to buy cigarettes from that store as I knew that there would be an instant phone call back to my mother before I even got a chance to walk out of the shop!!! (instant alerting J)

OK — I realise that I’ve cheated with my story above but over the last 15 years that I’ve been involved in payments, I’ve watched as companies and technologies strive to replicate my experience of the past and make it a reality for the future.

Payments are no longer the last thing we think about in our purchase process and with the proliferation of subscription services it’s often the first thing we think about and then promptly forget forever more. Just think how many monthly or annual subscriptions to products and services you currently have compared to just 5 years ago? (I personally have more than 10 and know people with many more than that).

In fact, the way we can pay often drives our purchasing preferences across all channels. I choose Uber where I can over traditional taxis where the “card machine isn’t working” is the common excuse to demand cash which I hardly ever carry. I look for stores that accept contactless payments so that I can speed up my flow through the queue on a commute and I end up buying most of my stuff online via Amazon because I just have to press the “buy it now” button and it magically appears the next day on my doorstep.

Open banking provides the opportunity for more players to enter the payments space and combined with IoT, AI, Image Recognition, Biometric Authentication and a whole host of other technologies they will remove even more friction from the purchase process.

I still don’t want to pay for anything — and with the latest wave of payments innovations that we will be hearing about here at The Banking Scene, it doesn’t feel like I am actually paying for anything anymore — until it gets to the end of the month and I see my bank balance of course.

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