Innovating Around Financial Concerns
Innovations in Payment Processing - WorldPay [Source: http://www.youtube.com/watch?v=FReLTlATyYQ]
This past holiday shopping season was a bit of a wake-up call for the tens of millions (possibly hundreds of millions) of consumers whose credit card data was reportedly hacked off store computers from a 17-year-old boy sitting a continent away. That indeed was a clarifying event as far as the retail industry was concerned.
We live in an age that is exciting because of all the technological possibilities. One of the basic requests of digital consumers, however, is that such levels of excitement not include heart palpitations when you realize a hacker has stolen your credit card information. If multinational retail chains can tap into Big Data to give us excellent deals and a wide array of products that we love, then can't they use such information to ward off criminals as well?
Perhaps credit cards have become too easy a target. In Europe, cards come equipped with digital chips that significantly deter would-be data thieves. The same is not true of the North American market -- and thieves around the world apparently have learned of the more relaxed security standards. So what's a store to do?
For starters, many retailers have already begun issuing smarter cards. There are new standards of security thanks to dual and multi-factor authentication standards. In fact, if financial services institutions that issue that cards can implement even two of the three following features, then consumers will be on their way to being more secure. What's interesting is that these applications can be used in digital and virtual currencies as well - but more on that in a minute. Think of security this way: what you have (the physical ownership of a card or currency), what you know (the PIN or Password) and what you are (biometrics).
Another idea that is generating interest is the so-called cyber-currency. They are digital units of measure that exist in cyberspace. They aren't printed by central banks and are therefore unregulated as such. An advantage of this characteristic is that a thief can't counterfeit things like Bitcoins with a color copier. Nor does a consumer need a credit card, because if the retailer accepts a cyber-currency, the payment is made instantaneously. What's appealing about this payment system is that it takes the actual card reading hardware out of the equation. And from what we've learned from these high-profile data breaches, the hardware can be the weak link in a transaction. It can be easily breached or manipulated to morph into a unit that scans and relays consumer data directly to the thieves.
We've been working with the prestigious European Business Awards to gauge what sorts of characteristics a winning company has in common with its peers. We learned that such companies - no matter how large or old - recognize technology to be a vital part of everything they do. For a retailer, that means using technology to better the customer experience but also to protect that consumer.
When an enterprise invests in technology to help them with that journey, they form a holistic view of what every part of their organization needs. My hunch is that the most innovative companies of tomorrow will come to test new payment methods that boost their connections to customers. Trust is something a business must earn. If a business can demonstrate that it's one step ahead of cyber-criminals because of its commitment to a new payment system, the brand can only strengthen in the eyes of the consumer base.
Of course, tomorrow's payment system might be different from business to business. One size does not fit all.