Consumers Should Drive the Future of Payments

MIAMI BEACH – The focus of the 2013 NACS Leadership Forum shifted to the future of payments on the event's second day. Gray Taylor, CEO of the Petroleum Convenience Alliance for Technology Standards (PCATS), began the day with a presentation covering the fundamental issues related to payments in the convenience store industry.

"Today, we have an absolutely abysmal situation," said Taylor, noting that the system is controlled by an oligarchy of a few banks and credit card issuing companies that are pushing an “old” technology -- the EMV [Europay, MasterCard and Visa] standard -- that is almost 20 years old. "EMV is a $30 billion solution to a $10 billion problem."

Looking to the future, though, Taylor sees hope in his belief that "even monopolies cannot ignore macro disruptions." These disruptions include changing consumer attitudes, particularly their use of smartphones and tablets. Taylor believes there is an "innovation void" in the current system and new entrants will bring new technology to the market.

He concluded by reminding retailers that they must act like stakeholders in the new payments landscape. "If we sit back and let others decide the future of payments, nothing will change," Taylor stressed.

Consumers’ move to mobile devices was elaborated upon by Don Kingsborough, senior vice president of enterprise solutions for PayPal., a division of eBay Inc., who spoke about how PayPal is positioned to become the preferred mobile payment system.

"Every day, more iPhones are sold than babies are born," Kingsborough said to spotlight the growth of mobile technologies. Today, 51 percent of consumers have a smartphone and 25 percent have a tablet. "The genie is out of the bottle."

Kingsborough pointed out that analysts predict by 2020, 50 billion devices will be attached to "the cloud." He also provided examples of some successful case studies of PayPal’s partnerships with Cumberland Farms Inc., MAPCO Express, NCR Corp./Retalix and Jamba Juice.

Cumberland Farms, for example, has a mobile application (app) that provides contextually relevant offerings, allows for mobile payment through PayPal and provides immediate rewards, such as a fuel price rollback. Jamba Juice’s app provides consumers the opportunity to order in advance and even set a time of day to pick up their order so it is fresh; they can also pay for it and get an e-receipt.

"This is not a technology looking for a consumer," concluded Kingsborough. "It’s all about consumer-driven innovation."

The 2013 NACS Leadership Forum wraps up today at the Fontainebleau Miami Beach.