The Green Sheet Online Edition
November 28, 2011 • Issue 11:11:02
Innovate or perish
The United States may be painstakingly slow to adopt smart card and contactless payments schemes, but we've been first with many other emerging technologies. Our global neighbors admire the pioneering spirit of American innovators like Steve Jobs and Bill Gates. Even our own payments industry has been an incubator for cool applications that ride the rails of traditional payment card processing.
Think of how many routine tasks have found their way to the countertop credit card terminal. We can pay bills, process claims, verify identity, confirm health care eligibility, and accept a whole slew of private-label gift and loyalty cards at the POS. These applications were the defining technologies of the last few decades. They set the stage for a whole new generation of apps and applets in the same way that analog set the stage for digital technology.
Find better tools
Today, it's no longer cutting edge to pay an electric bill at a 7-Eleven store when you can do it from anywhere. Let's face it, any app that requires you to go to a specific location to perform a single task looks a bit dated in today's always-on, always-connected world. We've become accustomed to making dinner reservations, ordering groceries, paying bills, doing online banking, and even making and receiving payments from increasingly ubiquitous and affordable smart phones.
Pretty soon, fanning through payment fobs in the shopping lanes will be behavior that goes the way of writing paper checks. Who needs key fobs when credit, debit and loyalty can be scrolled and tapped at the point of service using mobile wallets on smart phones?
Analyze merchant/consumer requirements
Merchants need us more than they need our technology. You can't build a house without a blueprint. And you can't build a processing system without a conceptual framework that begins with a solid understanding of the ground on which we build. Merchant level salespeople (MLSs) need to analyze each merchant's business and propose how technology should be applied.
A new generation of interactive consumers will opt in to connect their favorite brands to their mobile wallets and enable instant alerts based on geolocation, shopping history and personal preferences. These consumers value their relationships with select merchants and brands more than they value their privacy.
Our most basic definitions of currency and banking will be challenged as we learn to navigate a hyper-connected world of mobile payments, emerging technologies and changing consumer behavior.
No matter how you feel about this new world, your merchants are counting on you to explain it to them. They need to understand how they can use the new technology to build better and more committed relationships with their customers.
Apply technology strategically
How can MLSs manage expectations in this brave new era of emerging payments technology? The first order of business is to remind ourselves and our merchants that technology is just a tool. It is here to serve us by solving a problem or fulfilling a need.
Atul Gawande, a surgeon at Brigham and Women's Hospital in Boston and Associate Professor at Harvard Medical School, expressed the same idea as applied to medicine in a New Yorker article:
"Talk about medical progress, and people think about technology. We await every cancer drug as if it will be our salvation. We dream of personalized genomics, vaccines against heart disease, and the unfathomed efficiencies of information technology. I would never deny the potential value of such breakthroughs. ... But the capabilities of doctors matter every bit as much as the technology. This is true of all professions. What ultimately makes the difference is how well people use technology."
Just as other professions and industries have gained a deep respect for breakthroughs in technology, payments industry veterans have to be smart about the ways we use these tools to build robust, interactive environments for merchants.
In That Used to Be Us: How America Fell Behind in the World It Invented, authors Thomas L. Friedman and Michael Mandelbaum made a sweeping prediction:
"Within a few years, virtually everyone on the planet will have the tools and network connections to participate in the hyper-connected flat world. As that happens, all of these instruments of innovation and connectivity will become what electricity is for most of the world.
"Once everyone is connected, your prosperity will depend on how well you or your company or country can 'analyze and apply' all the data pouring through these networks to optimize ... services to everyone on the network. After all, the tools your company uses to perform all of this analysis will be sitting there in the cloud for every other company to use."
In the new, hyper-connected world where everyone has the same set of tools and technology, how will you analyze and apply widely available data to winning strategies for your own game plan, your company's plan and - especially - the specific needs of individual merchant customers?
Stay focused on ROI
When we present emerging technology to customers, we need to get beyond the wow factor and focus on the business case of implementing a new system. Some of it is very shiny, but does it answer a need?
Philip Farah, Principal, Financial Services at Cisco Systems Inc., recommends beginning any project with a solid understanding of its core value proposition and how this value will be used to capture revenue.
"A convergence of new capabilities - such as digital currency, solid cryptography and video analytics - and the interconnectedness of social media, encryption and cloud technology are driving today's payments," Farah said. "These trends can be very compelling to merchants and consumers, but what is the business case behind the technology?"
For Farah, it comes down to return on investment (ROI), and the question that brings this into focus is, "Can you make more money out of this, or are you just throwing money at it?" Merchants will pose the same question to their MLSs as they look for innovative ways to leverage emerging technologies.
Dale S. Laszig is Senior Vice President of Sales in the U.S. for Castles Technology Co. Ltd., a manufacturer and global provider of smart card, contactless and POS solutions. She can be reached at 973-930-0331 or firstname.lastname@example.org.
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