My Half Life in Payments
Earlier this year, I was invited to keynote a conference in Sydney – something I always enjoy doing. The conference sponsor wanted me to talk about disruptions, about how successful innovations in payments come into the world, and to provide a look inside Silicon Valley’s innovation culture. I took the opportunity to do all of that – but preparing for this keynote also provided me an opportunity to reflect back – as it dawned on me that 2015 was my 30th anniversary year in the payments industry.
Thirty years ago this year – in 1985 – I left my “first career” in big mainframe computer systems, after almost twenty years at IBM, to join a small “fintech” (no, we didn’t call it that then!) company based up on the hill in San Mateo, California. That company was Visa International – with a few hundred employees at that time.
Visa certainly wasn’t a true startup as we know startups today – in terms of raising venture financing, identifying a minimum viable product, etc. – but it was very much a startup in other dimensions. Visa was innovating with corporate structure, organizational roles, information systems, and key technologies to enable new forms of convenient consumer payments.
The year before I arrived, the original “founder” of Visa – Dee Hock – had moved on to “emeritus” status. Many important innovations in consumer payments were introduced during Dee’s tenure. Indeed, much of the framework of today’s consumer card payments systems were based on important principles orchestrated by Dee and the early Visa team.
When I arrived in 1985, Visa was on the cusp of one of the first important technology transitions – migrating the card acceptance environment from paper sales drafts (think carbon paper and telephone authorizations!) to electronic draft capture terminals with their ability to quickly perform real-time authorizations and eliminate capture costs associated with paper sales drafts (think checks!). This was the first of many such innovations in card-based payments.
I was very fortunate to work at Visa under the leadership of Roger Peirce. Roger headed up Visa’s Delivery Systems organization, applying technology to yield new innovations in the payment card industry. Roger’s ability to lift our sights – encouraging us to think ever bigger – was something very special. We led with our strong systems and technology capabilities into the world of debit cards and online ecommerce payments.
As we are approaching October 1st, 2015, we’re about to enter another phase as EMV in the US kicks off formally with the liability shift to merchants who fail to upgrade their POS systems. In the early 90’s at Visa, we were pursuing a number of chip card technology projects – Visa Super Smartcard being one of the better examples. Eventually, we decided that it made no sense for the card networks to pursue proprietary chip card technologies and that the industry needed to work together to develop a common chip card standard – like the mag stripe had been – which would support a common chip card acceptance environment.
I’ve been very fortunate to have enjoyed a delightful thirty years in payments – what I think of as my “half life” in the payments industry. I remember thinking when I left Visa in 1994 that we were done with the major innovations for card payments. We had credit and debit cards, electronic card authorization and draft capture, and more – “mission accomplished!” Looking at the innovations in payments over the 20+ years since, how wrong I was!
From today’s vantage point in late 2015, we’re closer to 2030 now than to 2000. Somehow 2000 seems very recent – and 2030 seems still far away – at least for folks of my generation. But we often don’t correctly perceive the pace at which time is passing. We can begin to see the shape of our payments future out there in 2030 – cards eventually going away, mobile and wearable companion devices with their apps replacing them, push-based electronic cash, etc. Even payments getting increasingly “submerged” and moved into the background (think Uber) where we just don’t have to make a conscious choice about payment.
Sometimes I think about today and conclude, as I mistakenly did in 1994, that we shouldn’t expect that much more innovation in payments. But I’m sure that’s wrong – we’ll all be delighted, I suspect, with what’s actually going to be our 2030 payments experience. As for me, I’m looking forward to seeing – and enjoying – it!