invisible payments, personalization, and the future of digital

It’s no surprise that digital is different today than it was five years ago, or five months ago, or even five days ago.  Digital is constantly evolving and it can be hard to keep up.  As a result, it’s important to stop chasing the evolution, and understand where it’s going.  Digital is moving to “zero step experiences.”  To better understand this concept, let’s start by understanding the historical drivers behind digital change.

The key driver of digital change surpasses the evolution of technology; digital change is driven by the need for simpler experiences.  If you examine key advances in technology over the past century, you will see that each advance can be traced back to an invention, then decades of new inventions rooted from the facilitation of the existing invention.  Let’s look at photography as an example.  The camera was invented in the early-to-mid 1800s.  Since then we’ve undergone waves of evolution in photography – changes in size, changes in zoom, aperture, light capture capabilities, changes in medium from dark rooms to polaroids to digital, to ultimately eliminating the everyday person’s need for a camera with a smart phone.  Computers are another example.  If we start with supercomputers that occupied entire floors of buildings, we’ve evolved into doing the majority of our computing in the palm of our hands (on the wrist for some).  The key theme here is simplification and ease of use.  Cameras are easier to use now.  Computers are easier to use now.

Let’s apply this logic to payments.  The ability to “make payments” started thousands of years ago as a bartering system.  “I’ll trade you three goats for one cow.”  It evolved to trading raw metals, then gold and silver coins.  Coins were too heavy and inconvenient, so we evolved to cash and lighter coins.  To further relieve the burden, plastic credit cards entered the scene.   Half a century later, we moved to digital payments.  PayPal invented the concept of a digital wallet that has evolved to peer-to-peer payments and the ability to transfer money digitally.  Digital payments has taken off over the last sixteen years, but it’s been circling within its comfort zone with more competitors in the space, and no real innovation.  Tapping to pay is not much simpler than swiping to pay.  It’s time to evolve to the next phase.  If simplification and ease of use are our key axioms, the future of digital payments needs to be more natural – to the point that it’s invisible.  If you’ve ever taken an Uber, you have experienced invisible payments.  You call an Uber, get in, get to your destination, get out – end of transaction, no click, no swipe, no tap, no cash.  Now apply this to every online purchase and every retail purchase.  This is key in the future of digital payments.

The second core focus in the evolution of digital payments is international cross-border payments.  While the ability to pay globally exists through plastic with exchange fees or currency exchange or international remittance firms, it is by no means is the simplest experience.  With the recent invention of Bitcoin and the blockchain, currency can and will evolve into a global standard using a global ledger system.  Currency is currently controlled by individual governing nations and in the case of most of Europe, the European Union.  When currency is transferred between nations, conflicting regulations, fees, exchange policies are surfaced.  Bitcoin, as a digital currency, is not regulated by any individual nation, but by key cryptography and security algorithms put into place to control influx and fraud.  The blockchain is the general ledger that keeps track of every Bitcoin purchase anywhere.  Together, these two inventions have demonstrated the power of a global unregulated currency in the future.  It removes international regulations, shifts censorship and power from government to consumers.  The current roadblocks to evolve to this standard are around trust and regulation.  While powerful, deregulation generates risk that can hinder adoption.  There will need to be an alliance of large financial institutions backing digital currency, and lobbying with international governments, for it to move into the mainstream and mitigate key risks.  Once this occurs, the transfer of currency will be seamless across borders.  Combined with invisible payments, expect a true reinvention and simplification of payments globally.  Invisible digital global payments are the next fifteen years in payments.  Any organization looking to partake and innovate in this arena will need to build strong international capabilities and payment capabilities.

This simplicity model can also be applied to digital web and mobile.  If you examine the evolution of digital experiences over the last ten years, the two key buzzwords have been “mobile” and “big data.”  Both of these terms are within the context of creating easy to access and easy to use experiences.  At the end of the day, digital consumers want what they want as fast and as easy as they can get it.  This principle has originated responsive web design, allowing rapid deployment of optimized experiences agnostic of device (even accommodating new devices like google glass and apple watch); it is getting ahead of change by allowing users the simplest experiences on the latest devices.  The same simplification principle has inspired data-driven experiences.  Data-driven newsfeeds eliminate the need for clicks or search.  They proactively get users the most relevant content on the most convenient platform.  This concept has even driven early phases of personalization, creating personalized content and personalized advertising.  The true evolution in digital over the next five years will take these nascent concepts and expand them to ubiquity across the customer experience.  In the near future, every digital action a user takes will be specific to them.  Every new digital experience created will tap into the user’s data.  Personalization will become the underlying engine behind every view a user sees.  No clicks, no search.  The content seeks out the user instead of the user seeking out the content.  The strongest players know what they know about their customers, and the rest will need to learn.

The lowest common denominator in the future of digital is to get to “zero step experiences.”  In the age of data, we know what a user wants, whether it’s from their banking or credit website, or from a digital payments provider.  They want the simplest experience that technology can enable.  They don’t want five steps, three steps, or even one step; the goal should be to get to zero steps.  The goal is to go invisible.  Present the user with what they want without them having to take any incremental action to achieve it.  Zero step experiences are the future of digital and those who get there first will own the future.