Part 1: The Chips are Down
When you go into a casino, you change your coin of the realm into a retailer currency that has no value anywhere else. You happily spend that currency (although I would like the picture below on the record because as Dion Lisle will testify I wound up $50 up on this blackjack game!) and then when you leave you change it back into coin of the realm.
Why don’t all retailers transact in their own currency? It costs Starbucks far less to handle their own prepaid value through their own back end than it does for them to pay someone else (e.g., issuers, acquirers and processors) to do it for them. Since, in Europe at least, obtaining an electronic money licence is well within the grasp of any moderately sized retailer, why don’t more of them do it? My Morrisons app could store Morrisons Mazuma and since I could top-up my Morrisons Mazuma at the press of a button on my smartphone, I could do it at point of sale immediately before the payment transaction.
Part 2: Thumbs Up!
I was chatting to a friend, a payment industry figure of some renown. He texted his wife “Honey please can you cancel the XXX Credit Union credit card because I left it in a strip club last night”. Later on during lunch, he got a text back to confirm that she’d cancelled it. I asked for the story. He told me I could tell it on the condition of total anonymity, and I agreed.
A few of the guys went to a strip club last night. You could draw cash out of the in-house ATM but it costs $8, or you could pay by credit card. Most of the guys paid the $8 anonymity tax, but my friend paid with his credit card. He used the credit card that he uses for business expenses (the strip club billed as a barbecue joint). Later in the event, he went to charge to card again and it was declined, presumably tripping some anti-fraud algorithm back at the bank. So he got out the credit union card and charged to that, which was how he came to leave it on the counter there. But here’s the interesting part: for the card charges, he had to swipe, sign and then provide two thumbprints!![picture redacted on the advice of counsel]
This is clearly because of “I didn’t do it” chargebacks, not because of stolen or counterfeit cards, which led me to reassess some of my thinking from the Identity and Verification panel that I chaired on day 1. If you only think of biometrics as an anti-fraud mechanism you miss part of the story. And I’ll bet this particular barbecue joint will still be demanding two thumbprints after the chip and PIN transition.
So what will happen if mobile payments take off? Now the transaction will include not only my PIN but also my location. It’ll be much harder to charge that back, telling your wife that you’d left your phone in some other guys jacket pocket and he’d gone to a strip club. Yet the demand will still be there, meaning that there will still be a requirement for some form of two-sided conditional anonymity, as I wrote about in my rather unscientific adult industry survey. But I would push a little further on this: surely two-sided conditional anonymity (the “stealth” payment card) should be the norm, not the exception. There is no reason for the merchant to know who I am and there is no reason for me to know who the merchant is (unless something goes wrong, when the removal of one or both sides of the anonymity is part of the dispute resolution or law enforcement processes). You could easily imagine paying in casinos, strip clubs, restaurants and elsewhere using a Vegas app that sat in an MCX framework but unlike the other MCX apps (e.g., Walmart) did not pass the consumer identity through to the merchant. A sort of “anti-recognition” function that would be well worth the $8 anonymity tax.
Part 3: Guns ‘n Ruses
In an attempt to try and fit in with local custom and mores, sensitive travellers as we are, we skipped out of Money2020 for a couple of hours to go and shoot guns over at Machine Guns Vegas. And a good time was had by all…
That’s an M249 SAW, for the afficionados by the way. Anyhow, when we got back to the conference, wearing t-shirts and shorts, a female colleague of Northern Californian origin and of refined disposition asked what we had been doing. When we told her, she looked at me as if to dismiss the testosterone-fuelled jaunt as a pointless, menopausal male waste of time (which, of course, it was). I said it was an important aspect of Money2020 to enjoy local culture and traditions. She said words to the effect of “you’re never going to get a blog angle on firing machine guns, no matter what ruse you employ to try and convince your finance director it was a payments-related valid business expense”.
In the morning, there had been some comments from retailers who said that they are not going to use traditional POS terminals in the future. Well, I have to tell the delegates that Machine Guns Vegas is ahead of the curve. When we arrived we sat down at a table and an assistant came over to check us in, go through the package options and take our payment. This was all done at the table using an iPad.
Oddly, the assistant typed in our credit card details. She said they had a swipe attachment for the iPad but it wasn’t working properly. After we’d been shooting we went to the gift shop to buy a T-shirt and have our pictures taken. We paid for this on the spot. Once again, no POS in sight. Our machine gun assistant had an iPod fitted with a Verifone PayWare swipe.
Naturally, when it came to signing for the transaction, and in the absence of high-security thumbprint scanners, I adopted appropriate anti-fraud measures.
Later that day we went to the bar to see the Giants beat the Cardinals to get into the World Series and then on for one of the most delicious steaks I have ever eaten.
Part 4: Ice, Ice Baby
This was a big conference. I’m not used to conferences on this scale. I got uncomfortable when the Digital Money Forum hit 130 people one year, and have capriciously capped the attendance at 100 ever since. There was so many people to meet, so many tracks to follow, so many demos to try out that the days were actually quite exhausting (although not as exhausting as the nights, I’ll grant you that). But it was beautifully put together and had some lovely touches that made a hardened conference circuit ligger stop and think. Giving the speakers their caricature mugs, for example.
When I was heading into the Mobile Retail panel (which was excellent, by the way) I came across a freezer cabinet full of free Haagen Daz bars for delegates. I chose a raspberry ripple, which was absolutely delicious. Given the sums of money involved in mounting a conference for 2,000 delegates at a swanky Vegas hotel resort, the cost of a couple of hundred ice cream bars is almost insignificant. Doesn’t show up on the spreadsheet. But as I sat in the afternoon panel, with my ice cream, with blood sugar levels recovering in real time, I fell in love with the organisers. What a nice touch. Thanks. We were very happy to have been sponsors of Money 2020.
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