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The Future of Payments

The Future of Payments. Technology’s Promise. A payment system is a system used for transferring money. What makes it a "system" is that it employs cash-substitutes …. Payments Today. Our systems are antiquated & fragile Static data, little authentication, fraud, inefficient

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The Future of Payments

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  1. The Future of Payments Technology’s Promise A payment system is a system used for transferring money. What makes it a "system" is that it employs cash-substitutes …

  2. Payments Today • Our systems are antiquated & fragile • Static data, little authentication, fraud, inefficient • Consumer segregated from choice & merchant • EMV is “last man in” proposition for U.S. • Modern technology market rules do not apply • Lip service to innovation, incrementalism= hegemony • “Better, faster and cheaper do not apply • This inertia is coming to a head • Even market powers cannot ignore macro disruptors…

  3. US Payments SOI 2016 Over $10 trillion in payments $2.4T in paper $6.4T “plastic” or privatized > $60B in transaction costs $1.6T electronic & EBT Technology, consumerization, pricing driving systems & funding Consolidation to debit

  4. U.S. Cstore Profit vs. Card Fees Durbin saved >$700 million Source: NACS State of the Industry Survey of 2012 Data & CSX, LLC.

  5. Payments Ecosystem – Business & Consumer Funding Systems Method • Ubiquity is essential • Standards essential • Security essential • Authentication is essential • HIGHLY DYNAMIC • Ubiquity is essential • Settlement essential • Little change, but some • OPPORTUNITIES HERE • Can be consumer or business • Does not have to be a bank • Not dynamic - regulated Trust and Identity

  6. Payments in Flux – The Perfect Storm Big Theme Risk/Opportunity Digital = “for profit” Consumer attitudes on payments BYOD defining payments platforms Analog to digital ID, new “trust” Traditional structure destroyed “Wild West” scenario • Digitization of payments • Redefining retail banking • Consumerization • Authentication • Many to many, “Cloud” • Standards absent, regulation spotty Standards create opportunity out of risk

  7. Consider this – Digital Identity

  8. Standards Revolutionary RoleCreating Competition & Innovation • Building blocks of best practice • Security needs to be common & consistent • Startups need to have a toolset to serve customers • Uniform datasets • Financial transactions are not that unique • Defined integration point data exchange • Comprehend “out of the box” use cases

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