Payment Predictions in 2016 from our CEO, BC Krishna | Part 1
For 2016, we asked our founder and CEO, BC Krishna, to share some insights on what he anticipates the payments industry will look like in 2016. Over the next two weeks, we will be hosting a three-part mini-blog series with BC’s commentary on:
- What will payments look like in 2016?
- What are the biggest trends and obstacles for the payments industry in 2016?
- What forms of payment will become increasingly popular in 2016?
- How will the AP process evolve in 2016?
- Will businesses look to their banks for more efficient AP automation solutions in 2016?
We’ll kick the series off with:
What will payments look like in 2016?
- Expect to hear a lot more about the Federal Reserve Bank’s initiative to improve our national payments infrastructure. In 2015, a large group of volunteers and steering committees made steady progress on two fronts: enabling faster payments and making payments more secure. It appears to be a consensus-driven initiative, which can work when done right. However, if done incorrectly, we might hear the peanut gallery throw out the old saying, “a camel is a horse built by a committee.” Not sure about that aphorism, though – I love camels.
- It will be a make-or-break year for the “mobile digital wallet” as we currently know it. For many, the mobile digital wallet has been a solution in search of a problem. But, large organizations with influential people that have cranked through more than a few financial models seem to believe that the megabucks spent on these initiatives will ultimately be worthwhile and revolutionize the checkout experience. I predict that 2016 will be the year that defines the value of the mobile digital wallet. Convenience? Security? Rewards? Lower cost transactions? Perhaps 2016 will usher in the subtle repositioning of the mobile digital wallet as a way to initiate secure payments. A way to initiate a transaction without handing over a piece of plastic to a merchant? Maybe that’s what all this fuss is about. Simple, secure payment transactions at the checkout counter. Maybe it will finally usher in the long overdue death of the merchant-initiated transaction.
- Bitcoin is dead, long live blockchain. I think we’re finally able to distinguish between the libertarian, anarchist, anti-Orwellian fantasy of Bitcoin as a fiat currency, and blockchain as an open, secure way to transfer value between transacting entities. I think 2016 will see mainstream players (financial institutions, for example) begin to seriously consider blockchain as a core value transfer infrastructure, and explore practical applications of that infrastructure. Which applications? Heaven knows! The pain of domestic and international electronic money transfer (for all parties involved) is so significant, and the value of blockchain infrastructure so obvious, that this feels like a matter of when, not if. The dreamers will tell you that blockchain provides a mechanism to affect almost ANY kind of transaction that involves authenticity, transparency, security, finality – transactions ranging from share transfers to real-estate transactions, custodial and escrow services, and more. This great chart explores the potential.