TUCSON, Ariz. -- When Selena Gomez is explaining complicated financial transactions, that’s a party.
On the plane ride over to the Conexxus meeting, I watched the movie "The Big Short," which was part drama and part history lesson of the mortgage crisis and subsequent collapse of Wall Street that led to the recession.
To explain certain complexities of all the buying and selling, several celebrities, including Gomez, looked straight into the camera and gave a lesson on loan structure or likened financial products to fish stew or a poker bet to make them more understandable.
I had to focus past the plane noise to understand many of the high-level concepts, but most were simplified enough to follow.
With that complexity in my head, I arrived in Tucson and headed to the Conexxus meeting, where the talk, of course, is of EMV (Europay MasterCard Visa) implementation. During a review of compliance obstacles, a speaker told the audience that they need to consider the “death of mag stripe.” Apparently, the credit-card companies are actually discussing the demise of the magnetic-stripe card, a vehicle that has been a lucrative weapon for them for years.
A panelist said it’s a discussion to bring to fleet-card providers because supporting magnetic stripe after the credit-card companies drop them will be a burden on the retailer. Then a second panelist spoke up and said it’s not just fleet cards, but other mag-stripe payments, such as gift cards.
"The Big Short" was all about people understanding the magnitude of the bigger picture by taking the time to understand the complexity of its parts. Because I wrote about Bitcoin last week, the larger discussion about the evolving face of payment was fresh in my head. So in my mind, the bigger picture with regard to mag stripe is payment.
Payment in an era of mobile phones means not just cash, credit and debit, but also loyalty points, discounts, prepaid and experiential rewards, such as concert tickets and getaway vacations. As manufacturers continue to connect directly with consumers, it’ll mean marketing dollars in the form of digital coupons.
Thinking about payment as more than a coin or a bill is an important realization because, ultimately, all parties have to understand the value of what each gets in return.
In more ancient times, people paid their debts with a goat. Today, it’s a person’s phone number, a promise to return the next day or participation in a mobile-banking solution. What is a retailer supposed to pay for that?
I’m reminded of a commercial about a shopping website where people’s heads explode in a purple cloud because they’ve blown their minds. In some versions of the commercial it’s because they live in the Old West or in the 1950s and they see a cash machine for the first time or encounter credit.
Getting past the complexity and mind-blowing enormity of where payment is going is the first step. Then, like the characters did in "The Big Short," the next step is to act with deliberate intent.
Angel Abcede is a senior editor at CSP magazine, covering industry trends, investigative topics and technology. His 25-year history with the channel fortifies his perspective and motivates him to seek out what's relevant, innovative and telling. Reach him at aabcede@winsightmedia.com.
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