I am as subject to peer pressure as anybody else, so having been bombarded with the top three of this, the key five of that and the must-have ten of the other for 2015, here’s my three roubles* worth on what we at Consult Hyperion see happening next year.
Last year, we caved to the marketing pressures of modern business and put out a “hot five” technology blog post for 2014. For the most part, it was pretty accurate. Which ought to be no surprise, since as blog readers must realise, my colleagues at Consult Hyperion are always working on projects involving the exploitation of new technologies in the transactions business while I maintain the deceptive appearance of a blog based on random thoughts. As an example: my prediction that tokenisation would be hot in 2014 was a cheat based on the fact that I knew just how much tokenisation work was already going on all around me down at CHYP End, not a evidence for my crystal balls.
Dave Birch, founder and “global ambassador” at payments consultancy Consult Hyperion, believes that a new approach is needed. “I think the days of spending more and more on security like PCI-DSS are drawing to an end. The PAN- [permanent account number] centric card solutions will soon be replaced by chip and pin, tokenisation and new (identity-centric) alternative mechanisms,” says Birch.
Why the quotes? Are they implying that I’m not really the “Global Ambassador”! But to the point. I also said that “proximity and vicinity” interfaces would be hot and I stand by that having seen both NFC and BLE become a focus. Of course, these two predictions were not entirely unconnected.
This has been reported as being a technology initiative that undermines NFC, whereas I tend to think that it dovetails with it.
I said APIs but that was also an easy prediction because everyone was saying the same thing and they were all right. I won’t say much more about this here as I’m going to be writing a couple of much longer posts about APIs early in the new year.
I said “recognition” because I could see that the increasing importance of transaction-appropriate identification and authentication technologies was shaping the business strategies available to our clients downstream and we are working on projects in that space right now. The key here is, as you might imagine, that the smartphone is capable to delivering a wide spectrum of identification and authentication possibilities and gives organisations real choices in how they recognise customers and how customers recognise them.
The one I didn’t think quite panned out as I was expecting was “small data”. I thought that more organisations would exploit the ability of the mobile to give customers a window into their own data and provide tools for managing and analysing that data. This certainly happened in some cases but not at the scale I was expecting (as I discovered when I tried to search my own bank accounts to find some transactions from a few months ago).
That was then, this is now.
This year I thought it will be interesting to take a slightly different tack, so I’ve chosen five areas where it is no secret that we are working on projects right now, but in a way I think even of our clients may not have seen just how important the new technologies are and the extent to which their business strategies will be constrained by seemingly low-level technology discussions that will be made over the coming year. So, with that in mind, here are my “live five” for 2015 where I think clients should pay serious attention to technology decisions that are being made in the short term because of what they mean for business in the long term.
The first area is in-app payments. Much of the discussion around ApplePay, tokenisation, NFC and retail has naturally focused on the “tap and pay” simplicity of the proposition. However, there are lots of reasons for thinking that this will be a sideshow rather than the main event. The introduction of tokenisation means that in-app payments (“app and pay”) can now be more secure than chip and PIN payments and since I rather imagine that most retailers would prefer no POS to enhanced POS and given the experiences that we already see around us from Uber to AirBnB and KFC, I think that in-app payments will become the norm, the most frictionless way to pay. Once again, this is hardly a wild
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The second area is re-localisation. We’ve lived through a period where there is been great pressure for internationalisation and the globalisation of payment solutions. Nobody wants to travel with 100 different cards in their pocket and when I get off the plane in the US or Australia or anywhere else I expect to be able to use my Visa, MasterCard or American Express card just as I do at home. But a combination of factors ranging from interchange regulation to in-app payments to non-bank players means that we will see a swing back toward more domestic solutions. In many parts of the world national payment solutions are seeing a resurgence, many of them looking at China Unionpay as an exemplar. But I think the trend toward multiple three-party systems instead of a small number of four-party systems means that we may see a return to payment systems that are owned and operated by retailers, brands and perhaps even local communities.
The third area is privacy. Once we have reasonable identification and authentication technology in place we can begin an intelligent discussion about how to use it. My observation is that for many of our clients the opportunity to make privacy part of their customer proposition, something that must be founded on strong security, is now a feasible business strategy. Privacy, as can already been seen in the actions of Apple and Google, is moving from a back-office hygiene factor to an integral component of consumer products.
The fourth is the blockchain. In parallel with a demand for privacy there is a growing demand for transparency. When you look at how a product like Venmo is evolving you can see that certain groups within the population are opting for their own transparency and I think this represents an underlying and more general demand transparency from institutions. Trading digital assets using an open distributed public ledger means a new way of trading that can combine privacy and transparency to create new and trusted markets.
The uniqueness of blockchain assets (the end of double-spending!) may mean that the impact of the technology is also felt in the physical. The fifth area of focus is ID for the Internet of things, or IDIoT as I call it for short. I agree with the predictions I see all around about 2015 being a turning point in the evolution of the Internet things and I see examples of new collectivity and new devices around me all the time. What I don’t see is a security infrastructure emerging to manage those connections and manage those devices and this is where I think we may see intellectual effort rewarded in 2015. In fact, I can see that this might become the key focus area of the coming year as as the Internet of things comes together from digital assets that are traded transparently, previously for the people involved in the training, in-app transactions using a variety of local identity and payment systems make for a seamless new environments of interaction and transaction.
As always, I’m keen to see what you think, so please don’t be shy in the comments. I can take it!
* According to my calculations, the approximate value of tuppence ha’penny at the time of writing.