Payments Innovation Needs Even More Acceleration

Why would we want to accelerate innovation in the payments industry when new technology is already driving change so fast it’s hard to keep up? 

Because it’s not enough for fresh thinking to “imagine” and then “develop” breakthrough ways of paying and being paid. It’s not enough for that thinking to gel into a prototype that can be funded and brought to market successfully. What is enough is duplicating that process everywhere. 

That can’t be done in a vacuum. It is the principle that has made Silicon Valley so successful: it is not the ideas, not the schools, not the young entrepreneurs, not the money, and not the major corporations sitting on the sidelines deciding to “build or buy."  It is a combination of all of these elements, not brought together like a salad but blended together in an ecosystem more like soup.

I have watched this phenomenon in Northern California and have had my share of success in duplicating it in U.S. and European markets. Here are the steps we should take to accelerate payment and e-commerce innovation.

For starters, conversation is at the heart of everything.

There is no shortage of opinions in our industry. They need to be shared. So the first phase is isolating topics that we are, or should be, talking about. The second is bringing people together to discuss those topics one-to-one. It’s networking on steroids, enabling conversations that can range from thoughtful to passionate…hopefully both. Technology can easily connect us from thousands of miles away, but there is no substitute for meeting face-to-face.

The second step is the financial ecosystem. Success requires the right support from a mix of people with diverse perspectives but a common goal. This financial ecosystem requires four elements: individuals; start-ups; investors; and enterprises. Individuals are start-ups of the mind; questioning, absorbing, testing, thinking. Individuals looking for a job provide more support than you think…to add the right spark to an existing company or light a fire under their own. 

Start-ups and investors are obvious; you can’t build anything without them. Large, existing enterprises might surprise you, but these are the market makers who must know what is emerging in the market or be passed by.

Structure is the next step. In the third phase of building you have to be able to scale or you’re left with a hut. The payments industry is not just global, it’s highly diverse. All four elements of your structure need to understand and be able to navigate through the maze of opportunities and barriers that present themselves across state or country lines. To do this well, your project has to scale beyond its geographic limitations. It has to have a technology platform to inform on a massive level and create constructive thought and discussion among knowledgeable executives around the world.

Also, success should be duplicated anywhere. Building a community that can truly accelerate innovation must be inclusive. Good ideas are not limited to the coasts…or that little city in south Texas. A blueprint insures new centers of innovation are easy to duplicate so the local talent can build them with the least friction possible. That’s not to say that someone from Atlanta can’t get involved in a community located in Portland. In fact, with decentralized and multi-location companies all over both continents, that should happen in any case. 

Finally, it's important to set and meet a deadline. In the past we’ve said “Rome wasn’t built in a day."  Now many of us want to know, “why not?” Accelerating innovation has a built in sense of urgency. Who needs to step up and make this happen? Surprisingly, the answer isn’t entrepreneurs or venture capitalists, it’s the market makers—banks, large payment enterprises, and major corporations that believe they can not only have a seat at the table but are certain they can set it. 

Individuals, entrepreneurs, and venture capitalists have to stick to their own backyard. Only the market makers have the time, the money and perhaps the greatest need to duplicate success in any of their locations. They have the most to gain if they are at the heart of accelerated innovation, and the most to lose if they aren’t.

The good news is that when these organizations decide to act, there are international professional networks with the right blueprints, tools and materials to help them build a connected network of innovation groups swiftly, easily and inexpensively. So where does that leave the promise of accelerated innovation in the payments industry? 

Right in your capable hands. And we’re waiting…

Daniel Chatelain is the founder and Managing Director of the Bay Pay Forum.